Source - RNS
RNS Number : 4928O
Triple Point VCT 2011 PLC
17 May 2018
 

 

Triple Point VCT 2011 plc

LEI: 213800AOOAQA5XQDEA89

The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 28 February 2018, prepared in accordance with section 435 of the Companies Act 2006, but is derived from those accounts.  Statutory accounts will be delivered to the Registrar of Companies on 18 May 2018. The auditors have reported on these accounts and their report was unqualified and did not contain a statement under section 498(2) of the Companies Act 2006.

 

Final Results

 

Triple Point VCT 2011 plc managed by Triple Point Investment Management LLP today announces the final results for the year ended 28 February 2018.

 

These results were approved by the Board of Directors on 17 May 2018.                     

 

You may view the Annual Report in due course on the Triple Point website www.triplepoint.co.uk

 

Financial Summary

Year ended 28 February 2018









Ord Shares

A Shares

B Shares


Total

Net assets

£'000

-  

10,637

6,826


17,463

Net asset value per share

Pence

-  

106.90p

100.00p


n/a

(Loss)/profit before tax

£'000

(2)

783

16


797

(Loss)/earnings per share

Pence

(0.03p)

6.83p

0.24p


n/a








Cumulative return to shareholders (p)






Net asset value per share


-   

106.90p

100.00p



Total dividends paid


115.05p

4.00p

-   



Net asset value plus dividends paid


115.05p

110.90p

100.00p

















Year ended 28 February 2017









Ord Shares

A Shares

B Shares


Total

Net assets

£'000

2,304

10,356

6,808


19,468

Net asset value per share

Pence

11.32p

104.07p

99.76p


n/a

(Loss)/profit before tax

£'000

(56)

431

(27)


348

Earnings/(loss) per share

Pence

0.06p

3.53p

(0.27p)


n/a








Cumulative return to shareholders (p)






Net asset value per share


11.32p

104.07p

99.76p



Total dividends paid


103.75p

-   

-   



Net asset value plus dividends paid


115.07p

104.07p

99.76p



 

Triple Point VCT 2011 plc ("the Company") is a Venture Capital Trust ("VCT"). The Investment Manager is Triple Point Investment Management LLP ("TPIM" and "Triple Point"). The Company was incorporated in July 2010.

 

·      Ordinary Shares: On 16 January 2018 the Company cancelled 20,349,869 Ordinary Shares, paying the final 1p back to Shareholders. At the date of cancellation, a total of £23,412,524 had been returned to the Ordinary Shareholders.

 

·      A Shares: On 30 April 2015 the A Share Class offer closed having raised £10.3 million with a total of 9,951,133 A Shares being issued.

 

·      B Shares: On 29 April 2016 the B Share Class offer closed having raised £6,972,311 with a total of 6,824,266 B Shares being issued.

 

The Strategic Report on pages 2 to 21, the Directors' Report on pages 22 to 26, the Corporate Governance report on pages 27 to 31 and the Directors' Remuneration Report on pages 32 to 35 have each been drawn up in accordance with the requirements of English law and liability in respect thereof is also governed by English law. In particular, the responsibility of the Directors for these reports is owed solely to Triple Point VCT 2011 plc.

 

The Directors submit to the members their Annual Report and Financial Statements for the Company for the year ended 28 February 2018.

 

Strategic Report

 

The Strategic Report, on pages 2 to 21, has been prepared in accordance with the requirements of section 414c of the Companies Act 2006. Its purpose is to inform the members of the Company and help them to assess how the Directors have performed their duty to promote the success of the Company, in accordance with section 172 of the Companies Act 2006.

 

Chairman's Statement

 

I am writing to present the Financial Statements for Triple Point VCT 2011 plc ("the Company") for the year ended 28 February 2018.

 

I am delighted to report that during the year the Company successfully completed the realisation of the Ordinary Share Class portfolio. The final 1p per share of capital was distributed to the Ordinary Class Shareholders on 31 January 2018. Taken together with the cumulative dividends of 114.05p, the total returned was 115.05p per share. This result exceeds the original target return of 108.4p at launch by 6.65p per share. 

 

Both the A Share Class and the B Share Class portfolios remain fully invested and are performing in line with expectations. The Company continued to oversee the ongoing operation of the A Share Class investments, as well as monitoring the construction of the gas fired energy centres in the B Share Class portfolio.

 

Investment Portfolio

 

The Company's funds at 28 February 2018 were 98% invested in a portfolio of VCT qualifying and non-qualifying unquoted investments. It continues to meet the condition that 70% of relevant funds must be invested in qualifying investments.

 

The Investment Manager's review on pages 11 to 14 gives an update on the portfolio of investments in 12 small unquoted businesses.

 

A Share Class

 

The A Share Class has investments in six companies in the Hydroelectric Power sector which between them own seven hydroelectric schemes in the Scottish Highlands. I am pleased to report that all schemes have been successfully commissioned and are fully operational.

 

The A Share Class has recorded a profit over the period of 6.83p per share and as at 28 February 2018 the NAV per share stood at 106.90p, which when taken with dividends paid to date provides a total shareholder return of 110.90p - slightly ahead of target.

 

The Company's distributable reserves are restricted until March 2019; consequently the Board has resolved to pay a 2.75p dividend, the maximum permitted. Once the distributable reserves are no longer restricted the Board expects the Company to be able to pay dividends at higher levels in order to meet A Share Class return target.

 

B Share Class 

 

The B Share Class has invested £5.1 million into two companies that commenced construction of two gas fired energy centers during May 2017. We are pleased to report both energy centers are now fully constructed and are due to be commissioned in the next few months.

 

The B Share Class has recorded a small profit over the year of 0.24p per share due to an uplift in the valuation of a Non-Qualifying Investment. Both qualifying companies will continue to be held at cost until they become operational and generating revenue. The NAV per share at 28 February 2018 was 100.00p.

 

Specific Risks

 

The principal risks which the Board feel the Company is facing are discussed in further detail on pages 9 and 10.

In particular the Board consider specific risks to be;

 

·    Investment risk associated with the VCT's portfolio of unquoted investments;

·    Risk of failure to maintain approval as a qualifying VCT;

·    Risk of inability to realise investments in order to return funds to investors in line with expectations.

 

The Board believes these risks are manageable and, with the Investment Manager, continues to work to minimise either the likelihood or potential impact of these risks within the scope of the Company's established investment strategy.

 

Outlook

 

After the successful realisation of the Ordinary Share Class investments and the subsequent return of funds, the Board and the Investment Manager will continue to support the businesses in which the Company is invested, and will work with them to improve efficiencies and maximise revenues. Going forward the Board will, together with the Investment Manager, explore opportunities to grow the Company.

 

The Autumn Budget 2017 brought about changes to the VCT landscape with the government, through its 'Financing Growth in Innovative Firms' consultation ("the Patient Capital Review") highlighting the importance of VCTs in helping to provide investments into SMEs. The outcome of this review has seen several changes proposed, including increasing a VCT's minimum qualifying percentage threshold from 70% to 80%. This will come into effect from 6 April 2019.

 

Another key finding of the Patient Capital Review is that future qualifying investments (from 6 April 2018) must adhere to new deployment timelines with 30% of new funds required to be invested within the first 12 months compared to the previous timeframe of 3 years.

 

VCTs will also be subject to a new principles-based test that will aim to ensure they focus on investment in companies seeking investment for their long-term growth and development.

 

The Company, along with the Investment Manager, has begun to put in place procedures to ensure the transition required will have a minimal effect on the Company. The Board believe we are making good progress in this area and are on track to implement any required changes.

 

If you have any questions about your investment, please do not hesitate to contact Triple Point on 020 7201 8990.

 

 

Jane Owen

Chairman

17 May 2018

 

Company Strategy and Business Model

 

The Directors assess the Company's success in meeting its objectives in relation to returns, stability, VCT qualification and, ultimately, exit.

 

Performance Update

 

At launch the Company targeted post-tax returns for Ordinary Shares of 9% to 11% pa. On a weighted average share price using a 9% return this is broadly equivalent to a total return to investors of 108.4p. This compares to the actual return to Shareholders of 115.05p.

 

The target for the A Share Class is to pay dividends of an average 5p per share from 2017 for four years, followed by a partial realisation targeted to bring the aggregate distribution from the Company to 70p per A Share after five years. Thereafter an ongoing dividend yield of 7% per annum of net asset value is targeted for a further nine years. The A Share Class reported an income return of 4.44p and a 2.39p capital return for the year to 28 February 2018. The net asset value per share for the A Share Class at 28 February 2018 stood at 106.90p.

 

The target for the B Share Class is to pay dividends of an average 5p per share from 2019. The B Share Class reported an income loss of 0.01p and a capital return of 0.25p for the year to 28 February 2018. The net asset value per share for the B Share Class at 28 February 2018 stood at 100.00p.

 

The Board and the Investment Manager are both committed to ensuring that returns on the investment portfolio are optimised and that the VCT continues to be managed in line with the Company's investment strategy and risk profile.

 

The Board expects the Investment Manager to deliver a performance which meets the objective of achieving long-term investment returns, including tax-free dividends. A review of the performance of the Company's investments during the financial year, the position of the Company at the year end and the outlook for the coming year is contained within the Chairman's Statement on page 2 to 3 and the Investment Manager's Review on pages 11 to 14.

 

Dividend Policy

Generally, a VCT must distribute by way of dividend such amounts as to ensure that it retains not more than 15% of its income from shares and securities. The Directors aim to maximise tax free distributions to shareholders of income or realised gains. It is envisaged that the Company will distribute most of its net income each year by way of dividend, subject to liquidity.

 

Investment Policy

 

The key objectives of the Company are to:

 

§ Pay regular tax-free dividends to investors;

§ maintain VCT status to enable investors to benefit from the associated tax reliefs;

§ reduce the volatility normally associated with early stage investments by applying its Investment Policy; and

§ In respect of the B Share Fund, provide investors with the option to exit shortly after 5 years following investment.

 

The Company will not vary these objectives to any material extent without the approval of the Shareholders.

 

The Company's investment policy has been designed to satisfy the legislative requirements of the VCT scheme and to provide stable and readily realisable returns. The Company's investment policy is directed towards new investments into cash generative businesses which are operating in stable or mature fields with a high quality customer base and which can provide a positive return to investors. The investments will be made with the intention of growing and developing the revenues and profitability of the target businesses to enable them to be considered for traditional forms of bank finance and other funding. This, in turn, should enable the Company to benefit from refinance gains or from a favourable sale to a third party.

 

As identified in the Chairman's Statement, the outcome of the government's Patient Capital Review was announced in the Autumn Budget in 2017. Although the landscape of VCTs will be affected the investment policy of the Company will continue to aim for regular tax-free dividends, maintenance of the VCT qualifying status and to minimise the volatility associated with early stage investments.

 

In respect of Qualifying Investments the Company will seek:

 

(a)      Investments in which robust due diligence has been undertaken into target investments;

(b)      Investments where there is a high level of access to regular, material financial and other information;

(c)      Investments where the risk of capital losses is minimised through careful analysis of the collateral available; and

(d)      Investments where there is a strong relationship with the key decision makers.

 

Target Asset Allocation

 

At least 70% of the Company's net assets will be invested in Qualifying Investments. The remaining assets will be exposed either to (i) cash or cash-based similar liquid investments or (ii) investments originated in line with the Company's Qualifying Investment policy but with realisation dates which fit with the liquidity needs of the Company.

 

Qualifying Investments will typically range between £500,000 and £5,000,000 and encompass businesses with strong asset bases, predictable revenue streams or with contractual revenues from financially sound counterparties. No single investment by the Company will represent more than 15 per cent of the aggregate net asset value of the Company at the time the investment is made.

 

Qualifying Investments

 

The Company will pursue investments in a range of industries but the type of business being targeted is subject to the specific investment criteria discussed below. The objective is to build a portfolio of unquoted companies which are cash generative and, therefore, capable of producing income and capital repayments to the Company prior to their disposal by the Company.

 

Although invested in diverse industries, it is intended that the Company's portfolio will comprise companies with certain characteristics, for example clear commercial and financial objectives, strong customer relationships and, where possible, tangible assets with value. Triple Point will focus on identifying businesses typically with contractual revenues from financially sound counterparties or a stream of predictable transactions with multiple clients. Businesses with assets providing valuable security may also be considered. The objective is to reduce the risk of losses through reliability of cash flows or quality of asset backing and to provide investors with tax-free income.

 

The criteria against which investment targets would be assessed include the following:

 

(a)      An attractive valuation at the time of the investment;

(b)      Minimising the risk of capital losses;

(c)      The predictability and reliability of the company's cash flows;

(d)      The quality of the business's counterparties, suppliers;

(e)      The sector in which the business is active;

(f)       The quality of the company's assets;

(g)      The opportunity to structure an investment to produce distributable income;

(h)      Growing and developing the revenues and profitability of the Company to enable it to be considered for traditional forms of bank finance and other funding; and

(i)       In respect of the B Share Fund, the prospect of achieving an exit after 5 years of the life of the B Share Fund.

 

As the value of investments increase the Company's Investment Manager will monitor opportunities for the Company to realise capital gains to enable the Company to make tax-free distributions to shareholders.

 

Non-Qualifying Investments

 

The Non-Qualifying Investments will be managed with the intention of generating a positive return. The Non-Qualifying Investments will comprise from time to time a variety of assets including investments following Triple Point's Navigator Strategy, quoted or unquoted investments (direct or indirect) in cash and highly liquid interest bearing investments, secured loans, bonds, equities, and collective investment schemes.

 

Borrowing Powers

 

The Company has no present intention of utilising direct borrowing as a strategy for improving or enhancing returns. To the extent that borrowing is required, the Directors will restrict the borrowings of the Company and exercise all voting and other rights or powers of control over its subsidiary undertakings (if any) to ensure that the aggregate amount of money borrowed by the group, being the Company and any subsidiary undertakings for the time being, (excluding intra-group borrowings), will not, without shareholder approval, exceed 30 per cent of its NAV at the time of any borrowing.

 

Risk Diversification

 

The Company aims to invest in a number of different businesses within different industry sectors but may focus investments in a single sector where appropriate to do so. No single investment by the Company will represent more than 15 per cent of the aggregate NAV of the Company at the time the investment is made.

 

The above Investment Policy does not take into account the changes to the VCT rules relating to non-qualifying investments that took effect on 6 April 2016. From that date any non-qualifying investments must be in either shares or units in alternative investment funds, undertakings for collective investment in transferable securities (UCITS) which meet certain requirements or ordinary shares / securities in a company which are acquired on a regulated market. The Investment Manager will make sure that all non-qualifying investments made after that date meet the new requirements.

 

Key Performance Indicators

 

As a VCT the Company's objectives are providing Shareholders with up front tax relief and returns through capital appreciation and the payment of dividends.

 

The primary KPI in meeting these objectives is:

 

·    Net Asset Value plus dividends paid.

 

A record of this indicator is detailed on page 1 entitled Financial Summary.

 

Tax Benefits

 

The Company's objective is to provide shareholders with an attractive income and capital return by investing its funds in a broad spread of unlisted UK companies which meet the relevant criteria for investment by Venture Capital Trusts.

 

Investing in a VCT brings the benefit of tax-free dividends, as well as up-front income tax relief.  The Company continues to meet the VCT qualification requirements which are continuously monitored by the Investment Manager and reviewed by the Directors. 

 

Investment classification by asset value and sector value are shown on the following pages:

 

Investment Portfolio - A Share Class

VCT Qualifying Investments          65%  

VCT Non-Qualifying Investments        32%

Cash                                               3%             

 

Investments by Sector - A Share Class

 

The A Shares unquoted investment portfolio by sector at 28 February 2018:

 

Hydro Electric Power                             66%

SME Funding Hydro Electric Power        18%

SME Funding Other                               16%

 

Investment Portfolio - B Share Class

 

VCT Qualifying Investments          74%  

VCT Non-Qualifying Investments        25%

Cash                                               1%    

 

Investments by Sector - B Share Class

 

The B Shares unquoted investment portfolio by sector at 28 February 2018:

 

Gas Power              75%

SME Funding - Other     25%

 

VCT Regulation

 

VCTs were first introduced in the Finance Act 1995 to provide a means for private individuals to invest in unquoted companies in the UK. The Finance Act 2004 introduced changes to VCT legislation designed to make VCTs more attractive to investors. The current tax benefits available to eligible investors in VCTs include:

·    Up-front income tax relief of 30% on a maximum investment of £200,000 per tax year on newly-issued shares;

·    exemption from income tax on dividends received; and

·    exemption from capital gains tax on disposals of shares in VCTs.

 

Since the Finance Act 2004, the VCT rules have subsequently been amended under the Finance Act 2014 and The Finance (No 2) Act 2015. The Investment Manager, utilising advice from Philip Hare & Associates LLP, ensures continued compliance with any legislative changes.

 

As referred to in the Chairman's Statement on page 3, further changes are to be introduced with effect from 6 April 2019. The Company will continue to ensure its compliance with the qualification requirements. 

 

The Company has been approved as a VCT by Her Majesty's Revenue and Customs. In order to maintain this approval the Company must comply with certain requirements on a continuing basis. Within three years from the effective date of provisional approval or later allotment at least 70% of the Company's investments must comprise "qualifying holdings" of which at least 30% must be in eligible Ordinary Shares. This investment criterion continues to be met.

 

FCA Regulation

 

On 22 July 2014 Triple Point VCT 2011 plc registered with the Financial Conduct Authority as a small Alternative Investment Fund Manager ("AIFM") under the AIFM Directive.

 

Exit Programme

 

The Directors and the Investment Manager put in place a programme to manage the investment realisations for the Ordinary Class Shareholders over the course of 2016. During the year these plans were realised and exit of the Ordinary shares was successfully completed, resulting in a total return to Shareholders of 115.05p per share.

 

The Company and Investment Manager continue to be committed to ensuring a timely exit and return of funds to B Class Shareholders as soon as practicable after the end of the minimum five year holding period. The Investment Manager has a strong track record in managing such exits. In relation to the A Share Class the Company is intending to secure a partial realisation after five years but plans to retain its investment in the Hydro companies until 2030.   

 

Principal Risks and Risk Management

 

The Directors carry out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. The main areas of risk identified by them, along with the risks to which the Company is exposed through its operational and investing activities, are detailed below.

 

VCT qualifying status risk: the Company is required at all times to observe the conditions laid down in the Income Tax Act 2007 for the maintenance of approved VCT status.  The loss of such approval could lead to the Company losing its exemption from corporation tax on capital gains, to investors being liable to pay income tax on dividends received from the Company and, in certain circumstances, to investors being required to repay the initial income tax relief on their investment.  The Investment Manager keeps the Company's VCT qualifying status under continual review and reports to the Board on a quarterly basis.  The Board has also appointed Philip Hare & Associates LLP to undertake an independent VCT status monitoring role.

 

Investment risk: the Company's VCT qualifying investments will be held in small and medium-sized unquoted investments which, by their nature, entail a higher level of risk and lower liquidity than investments in large quoted companies. This can make it difficult to realise investments at the end of a particular Share Class's holding period but the Directors and Investment Manager aim to limit the risk attached to the portfolio as a whole by careful selection and timely realisation of investments, by carrying out rigorous due diligence procedures and by maintaining a spread of holdings in terms of industry sector and geographical location. The Board reviews the investment portfolio with the Investment Manager on a regular basis.

 

Financial instrument risk: Financial Instrument risks are described in note 16.

 

Financial risk: as a VCT the Company is exposed to market price risk, credit risk, fair value risk, liquidity risk and interest rate risk. As most of the Company's investments will involve a medium to long-term commitment and will be relatively illiquid, the Directors consider that it is inappropriate to finance the Company's activities through borrowing, other than for short term liquidity. 

 

Failure of Internal controls risk: the Board regularly reviews the system of internal controls, both financial and non-financial, operated by the Company and the Investment Manager. These include controls designed to ensure that the Company's assets are safeguarded and that proper accounting records are maintained.

 

Viability Statement

 

In accordance with provision C.2.2 of the 2016 revision to the UK Corporate Governance Code, the Directors have assessed the prospect of the Company over a longer period than 12 months required by the Going Concern provision. In order to assess this requirement, the Board takes into account the Company's current position and the principal risks as set out on pages 9 and 10 so that the Directors may state that they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment.

 

To provide this assessment the Board has considered the Company's financial position and ability to meet its expenses as they fall due as well as considering longer term viability:

 

·      the expenses of the Company are predictable and modest in comparison with the assets and there are no capital commitments foreseen which would alter that position;

·      the Company has no employees, only Non-Executive Directors and consequently does not have redundancy

or other employment related liabilities or responsibilities;

·      most of the Company's investments will involve a medium to long-term commitment and will be relatively illiquid but the board reduces the risk as a whole by careful selection and timely realisation of investments; and

·      the Directors will continue to monitor closely changes in the VCT legislation and adapt to any changes to ensure the Company maintains approval. The Directors have appointed an independent adviser to undertake the VCT status monitoring role.

 

Based on the results of this review, the Directors have a reasonable expectation that the Company will be able to continue its operations and meet its expenses and liabilities as they fall due over the period of their assessment. During the next five years the B Share Class will reach its 5 year holding period and the A Share Class will partially exit, based on this the Directors believe it is reasonable to make their assessment over 5 years.

 

Share Price Discount Policy

The Company has a share buy-back facility, committing to buy back shares at no more than a 10% discount to the prevailing NAV, subject to the Directors' discretion. We will be asking shareholders at the Annual General Meeting to extend the facility for the Company to purchase shares in the market for cancellation. Shareholders should note that if they sell their shares within five years of subscription they forfeit any tax relief obtained. If you are considering selling your shares please contact TPIM on 020 7201 8989.

 

Environmental, Social, Employee and Human Rights Issues

 

Due to the nature of the Company's activities, there being no employees and only 3 Non-Executive Directors, there are no Human Rights Issues to report. Its investment in companies engaged in energy generation from renewable sources means it will contribute to the reduction in carbon emissions.

 

Gender Diversity

 

The Board of Directors comprises 1 female and 2 male Directors. The Investment Manager has 70 staff of whom 37 are men and 33 are women.

 

Investment Manager's Review

Sector Analysis

 

The unquoted investment portfolio can be analysed as follows:



Electricity Generation

SME Funding


Industry Sector

Cinema Digitisation

Hydro Electric Power

Gas Power

Hydro Electric Power

Other*

Total Unquoted Investments


£'000

£'000

£'000

£'000

£'000

£'000

Investments at 28 February 2017







Ordinary Shares

191

-  

-  

-  

5

196

A shares

-  

6,335

-  

1,949

1,518

9,802

B shares

-  

-  

5,100

-  

1,686

6,786

Total Investments

191

6,335

5,100

1,949

3,209

16,784

Investments made during the period







Ordinary Shares

-  

-  

-  

-  

-  

-  

A Shares

-  

-  

-  

-  

-  

-  

B Shares

-  

-  

-  

-  

-  

-  

Total additions

-  

-  

-  

-  

-  

-  

Investments disposed of during the period







Ordinary Shares

(191)

-  

-  

-  

(5)

(196)

A shares

-  

-  

-  

(297)

-  

(297)

B Shares

-  

-  

-  

-  

-  

-  

Total disposals

(191)

-  

-  

(297)

(5)

(493)

Investment revaluations during the period







Ordinary Shares

-  

-  

-  

-  

-  

-  

A shares

-  

242

-  

-  

(3)

239

B Shares

-  

-  

-  

-  

24

24

Total revaluations

-  

242

-  

-  

21

263

Investments at 28 February 2018







Ordinary Shares

-  

-  

-  

-  

-  

-  

A Shares

-  

6,577

-  

1,652

1,515

9,744

B Shares

-  

-  

5,100

-  

1,710

6,810


-  

6,577

5,100

1,652

3,225

16,554

Unquoted Investments %

0.00%

39.73%

30.81%

9.98%

19.48%

100.00%

 

* Other SME funding includes £1,515,000 of A Ordinary Share Class investments and £1,710,000 of B Ordinary Share Class investment in to a UK based LLP which provides finance to small and medium sized enterprises.

 

The VCT was established to fund small and medium sized enterprises. After the exit of the Ordinary Share Class during the year, it now has two share classes with separate portfolios as detailed on page 11. At the year end the overall portfolio comprised investments in 12 small, unquoted companies focussing investments in two areas: electricity generation and SME funding.

 

This year the Company elected not to raise funds for new investments due to the desire to understand the implications of the Patient Capital review (mentioned in the Chairman's Report on page 3) and an uncertain investment environment. With both remaining share classes fully invested, the Company and the Investment Manager have focussed on asset optimisation and portfolio management.

 

A number of new requirements were put in place following the Patient Capital Review, including an increase in the threshold for qualifying investments from 70% to 80% from 6 April 2019. The Investment Manager monitors compliance with all qualification conditions closely, and maintains a forward-looking Qualifying Investment Tracker.  We will endeavour to ensure continuing compliance with all conditions. 

 

The majority of the Company's portfolio consists of businesses which are fully operational and revenue generating, with two still in the construction process and expected to be revenue generating in the next few months. Generally, performance during the year across the portfolio has been in line with expectations with the A Share Class recording an uplift in NAV (including dividends) from the performance of its portfolio from 104.07p per share to 110.90p per share. The B Share Class recorded an uplift from 99.76p per share to 100.00p per share due to a revaluation of a non-qualifying investment.

 

Review & Outlook

                                                                                                                            

Ordinary Share Class

 

April 2016 marked the end of this Share Class's five year minimum VCT holding period. The successful realisation of the Ordinary Share Class investments was completed during the year and the shares were cancelled on 16 January 2018.  The company subsequently made its final distribution to Shareholders which brought the total returned to Shareholders to 115.05p per share. This exceeds the original target return of 108.4p at launch by 6.65p per share. 

 

A Share Class

 

The A Share Class has investments in six hydro-electric companies which between them own seven hydroelectric schemes in the Scottish Highlands. All seven schemes have been commissioned and are operational. The A Share Class also has investments in two other companies which provide funding to SMEs.

 

We are pleased to report that the performance of the hydro schemes has improved over the course of 2017 after the uncharacteristically dry autumn and winter period in 2016. As a result the majority of the portfolio has recorded an uplift in valuations.  One company, Green Highland Shenval Ltd, has resolved a contractual dispute which has resulted in a write down. Nonetheless, the company continues to operate well and we believe that the VCT will recover its original investment. Overall the A Share Class is pleased to have recorded an increased profit of 6.83p per share for the year.

 

The seven hydro-electric schemes are "run of river" plants which capture river flow agreed above a certain level as determined by the Scottish Environment Protection Agency (SEPA).  Water flow is generally captured before a descent and flows down the penstock (pipe) to a turbine engine which produces electricity.  The water is then returned to the river.  The hydro companies benefit from government backed Feed-in Tariff payments based on output and also from the sale of the electricity produced to utilities or other power companies under Power Purchase Agreements (PPAs).  The contract terms were renewed during 2017 and, due to the export market rising, the companies have continued to obtain better power prices than were originally forecast, currently earning an average of 6.19 pence per kWh (2017: 6.62 pence per kWh).

 

The hydro companies remain strongly focussed on seeking efficiencies and operating improvements.  As part of this focus, during 2017 an Asset Manager was appointed to explore ways in which the companies could further enhance the operational performance of the schemes. Their work included reviewing scheme layouts, hydrology data, performance data and reporting on any inefficiencies and making recommendations on where improvement could be made to enhance performance. The companies are currently implementing some of the recommendations made by the Asset Manager.

 

When the business rates review took place in 2016 there was some concern that the results would significantly increase the costs of hydro businesses which occupy comparatively large areas of very rural land compared to

the relative level of their turnover.  The companies, together with other industry members and the British Hydropower Association, have continued to lobby the Scottish Government to recognise these anomalies.

 

In February 2017, the Scottish Government announced a 12.5% limit on business rates increases in the hydro sector for schemes up to 1 MW for the year to 31 March 2018 and, on 12 September 2017, further announced a 60% relief on business rates for small-scale hydro schemes from 1 April 2018. The Company has investments in two companies with schemes above 1MW and the position for such schemes still remains unclear.  Longer term, the Scottish Government has confirmed that it will work alongside industry organisations to fast track a review of the Plant and Machinery Order, which should address these issues.

 

We are pleased with the performance of the portfolio to date and we believe that, as the portfolio matures, there remains the opportunity to further enhance its value through strategic operational management.

 

Top Holdings by The A Share fund

Qualifying

Green Highland Allt Garbh Ltd has constructed a 1,300 KW run-of-river hydro-electric power plant near Glen Affric, Cannich.  The scheme completed construction and was commissioned in July 2017.  The company earns Feed-in-Tariffs and other revenues from the generation and export of electricity to the National Grid.

Green Highland Allt Ladaidh (1148) Ltd operates a 1,350 KW run-of-river hydro-electric power plant near Loch Garry, Invergarry in the Scottish Highlands.  The company earns Feed-in-Tariffs and other revenues from the generation and export of electricity to the National Grid.

Green Highland Allt Luaidhe (228) Ltd operates a 500 KW run-of-river hydro-electric power plant located in Knockie, Whitebridge near Inverness in the Scottish Highlands.  The company earns Feed-In-Tariffs from the generation and export of electricity to the National Grid.

Green Highland Allt Phocachain (1015) Ltd operates two separate 500 KW run-of-river hydraulic power plants located in Glen Moriston, in the Scottish Highlands.  The company earns Feed-in-Tariffs from generation and export of electricity to the National Grid.

Non-Qualifying

Broadpoint 2 Ltd is a VCT non-qualifying investment, which has provided investment to hydro-electric power companies.

Broadpoint 3 Ltd owns equity stakes in hydro-electric power companies and one rooftop solar PV company.

Funding Path Ltd is a VCT non-qualifying investment, which has invested in an LLP that provides finance to small and medium sized enterprises (SME's).

Modern Power Generation Ltd is a VCT non-qualifying investment, which has invested in an LLP that provides finance to small and medium sized enterprises (SME's).

 

B Share Class

 

The B Share Class remains fully invested with one Non-Qualifying Investment and two Qualifying Investments in companies constructing gas fired energy centres. Both energy centres are in the final stages of construction, and are due to be commissioned in the next few months.

 

These energy centres are containerised gas combustion engines that generate electricity for onward sale, especially at times when there is high demand for power. Britain is aiming to close its coal-fired power plants by 2025, and it is therefore expected that there will be a shortage in the supply of energy in the UK. Although renewable energy makes an increasing contribution, the irregular nature of its production means that other baseload sources will also be required to make up the deficit.

 

The companies have taken advantage of a gap in the market by constructing, operating and owning gas fired energy centres to produce and sell electricity to customers. The energy centres utilise simple technology, provided by Rolls Royce, to provide a reliable and secure energy supply.

 

Gas will be purchased from the National Transmission System and combusted in the engines. The electricity will then be exported to the National Grid and sold under a power purchase agreement. The companies will receive revenues from the sale of electricity and income from embedded benefits. 

 

Embedded benefits cover a range of payments available to small electricity generators connected to the distribution network, rather than the transmission grid. Benefits can be earned for generating at peak times and for local distribution. In addition generators can earn additional revenues by operating outside the peak 4-7pm hours to take advantage of 'intraday' and 'post-gate closure' price volatility.

 

Both qualifying companies detailed below are in their infancy and have been actively managing the construction of their energy centres. A more detailed review will be included once the energy centres have sufficient operating history for meaningful analysis.

 

In the year ahead our focus will be on working with the companies as they become fully operational to maximise their performance in line with the return targets of the Share Class.

 

Top Holdings by The B Share fund

Qualifying

Distributed Generators Ltd has constructed a 5 MW gas power plant in Bedford.  The 2 x 2.5 MW gas fired MTU Rolls Royce Engines have been successfully installed and construction was completed in May 2018. 

Green Peak Generation Ltd has constructed a 7.5 MW gas power plant in Workington, Cumbria.  The 3 containerised 2.48 MW gas fired MTU Rolls Royce Engines have been successfully installed and construction was completed in May 2018. 

Non-Qualifying

Modern Power Generation Ltd: is a VCT non-qualifying investment, which has invested in an LLP that provides finance to small and medium sized enterprises (SME's).

Non Qualifying Investments

 

SME Funding

The Company has non-qualifying investments in four finance companies. These companies have invested in a dedicated non-bank SME lending business which aims to address the financing needs of the UK SME market by providing business critical loans and asset finance to over 60,000 UK Corporate and SME customers.

 

If you have any questions, please do not hesitate to call us on 020 7201 8990.

 

Ben Beaton

Managing Partner

For Triple Point Investment Management LLP

17 May 2018

Investment Portfolio Summary


28 February 2018


28 February 2017


        Cost 

     Valuation


        Cost 

     Valuation


£'000

£'000


£'000

£'000

Unquoted qualifying holdings

11,423

68.84

11,677

69.07


11,723

63.85

11,626

63.51

Non-Qualifying holdings

4,811

29.01

4,877

28.84


5,109

27.84

5,158

28.18

Financial assets at fair value through profit or loss

16,234

97.85

16,554

97.91


16,832

91.69

16,784

91.69

Cash and cash equivalents

353

2.15

353

2.09


1,525

8.31

1,525

8.31


16,587

100.00

16,907

100.00


18,357

100.00

18,309

100.00

Qualifying Holdings










Unquoted










Cinema Digitisation










DLN Digital Ltd

-  

-  

-  

-  


300

1.63

191

1.04

Hydro Electric Power










Green Highland  Allt Choire A Bhalachain Ltd

30

0.18

30

0.18


30

0.16

29

0.16

Green Highland Allt Garbh Ltd

2,250

13.56

2,250

13.31


2,250

12.26

2,250

12.29

Green Highland Allt Ladaidh (1148) Ltd

1,470

8.86

1,802

10.66


1,470

8.01

1,470

8.03

Green Highland Allt Luaidhe (228) Ltd

855

5.15

937

5.54


855

4.66

877

4.79

Green Highland Allt Phocachain (1015) Ltd

858

5.17

1,005

5.94


858

4.67

849

4.64

Green Highland Shenval Ltd

860

5.18

553

3.27


860

4.68

860

4.70

Gas Power










Distributed Generators Ltd

3,200

19.29

3,200

18.93


3,200

17.43

3,200

17.48

Green Peak Generation Ltd

1,900

11.45

1,900

11.24


1,900

10.35

1,900

10.38


11,423

68.84

11,677

69.07


11,723

63.85

11,626

63.51

Non-Qualifying Holdings










Unquoted










Hydro Electric Power










Green Highland  Allt Choire A Bhalachain Ltd

3

0.02

3

0.02


3

0.02

3

0.02

Green Highland Allt Ladaidh (1148) Ltd

30

0.18

30

0.18


30

0.16

30

0.16

Green Highland Allt Luaidhe (228) Ltd

61

0.37

61

0.36


61

0.33

61

0.33

Green Highland Allt Phocachain (1015) Ltd

2

0.01

3

0.02


3

0.02

3

0.02

Kinlochteacius Hydro Ltd

-  

-  

-  

-  


47

0.26

47

0.26

SME Funding:










Hydro Electric Power










Broadpoint 2 Ltd

550

3.32

550

3.25


800

4.36

800

4.37

Broadpoint 3 Ltd

1,005

6.06

1,005

5.94


1,005

5.47

1,005

5.49

Other










Broadpoint Ltd

-  

-  

-  

-  


-  

-  

5

0.03

Funding Path Ltd

1,000

6.03

1,000

5.91


1,000

5.45

1,010

5.52

Modern Power Generation Ltd

2,160

13.02

2,225

13.16


2,160

11.77

2,194

11.98


4,811

29.01

4,877

28.84


5,109

27.84

5,158

28.18

 

Financial Assets including those held for sale are measured at fair value through profit or loss. The initial best estimate of fair value of these investments that are either quoted or unquoted on an active market is the transaction price (i.e. cost). The fair value of these investments is subsequently measured by reference to the enterprise value of the investee company, which is best deemed to reflect the fair value. Where the Board considers the investee company's enterprise value to remain unchanged since acquisition, investments continue to be held at cost less any loan repayments received. Where the Board considers the investee company's enterprise value has changed since acquisition, investments are held at a value measured using a discounted cash flow model or the value to be realised on disposal which is equivalent to fair value.

Investment Portfolio Ten Largest Unquoted Investments

 

Distributed Generators Ltd





Date of first investment

Cost £

Valuation £

Valuation Method

Income recognised by TP11 for the year  £'000

Equity Held by TP11 %

Equity Held by TPIM managed funds %

02-Apr-2016

3,200,000

3,200,000

Cost

(1)

45.00

45.00








Summary of Information from Investee Company Financial Statements 2017:

£'000








Turnover


-

Earnings before interest, tax, amortisation and depreciation (EBITDA)


(92)

Loss before tax


(91)

Net assets before VCT loans


3,911

Net assets


2,681


Distributed Generators Ltd has constructed a 5 MW gas power plant in Bedford.  The 2 x 2.5 MW gas fired MTU Rolls Royce Engines have been installed and construction was completed in May 2018. Once commissioned, the plant will generate revenues through the sale of electricity to the National Grid, when electricity prices are at their highest.

 

Green Highland Allt Garbh Ltd





Date of first investment

Cost £

Valuation £

Valuation Method

Income recognised by TP11 for the year  £'000

Equity Held by TP11 %

Equity Held by TPIM managed funds %

01-Apr-2015

2,250,000

2,250,000

Cost

151

22.79

50.25








Summary of Information from Investee Company Financial Statements 2017:

£'000








Turnover


52 

Earnings before interest, tax, amortisation and depreciation (EBITDA)


 17

Loss before tax


 (82)

Net assets before VCT loans


 4,876

Net assets


 3,389


Green Highland Allt Garbh Ltd has constructed a 1,300 KW run-of-river hydro-electric power plant near Glen Affric, Cannich.  The scheme completed construction and was commissioned in July 2017.  The company earns Feed-in-Tariffs and other revenues from the generation and export of electricity to the National Grid.

 

Modern Power Generations Ltd





Date of first investment

Cost £

Valuation £

Valuation Method

Income recognised by TP11 for the year  £'000

Equity Held by TP11 %

Equity Held by TPIM managed funds %

04-Apr-2016

2,160,000

2,225,000

Share of net assets

107

49.90

49.90








Summary of Information from Investee Company Financial Statements 2017:

£'000








Turnover


150 

Earnings before interest, tax, amortisation and depreciation (EBITDA)


144 

Profit before tax


54 

Net assets before VCT loans


2,204 

Net assets


1,409 


Modern Power Generations Ltd is a VCT non-qualifying investment, which has invested in an LLP that provides finance to small and medium sized enterprises (SME's).

 

Green Peak Generation Ltd





Date of first investment

Cost £

Valuation £

Valuation Method

Income recognised by TP11 for the year  £'000

Equity Held by TP11 %

Equity Held by TPIM managed funds %

02-Apr-2015

1,900,000

1,900,000

Cost

(4)

41.67

89.94








Summary of Information from Investee Company Financial Statements 2017:

£'000








Turnover


Earnings before interest, tax, amortisation and depreciation (EBITDA)


(132) 

Loss before tax


(95) 

Net assets before VCT loans


3,911 

Net assets


2,681 


Green Peak Generation Ltd has constructed a 7.5 MW gas power plant in Workington, Cumbria.  The 3 containerised 2.48 MW gas fired MTU Rolls Royce Engines have been installed and construction was completed in May 2018. Once commissioned the plant will generate revenues through the sale of electricity to the National Grid when electricity prices are at their highest.

 

Green Highland Allt Ladaidh (1148) Ltd





Date of first investment

Cost £

Valuation £

Valuation Method

Income recognised by TP11 for the year  £'000

Equity Held by TP11 %

Equity Held by TPIM managed funds %

19-Mar-2015

1,470,000

1,832,000

Discounted cash flow

126

15.07

50.25








Summary of Information from Investee Company Financial Statements 2017:

£'000








Turnover


484 

Earnings before interest, tax, amortisation and depreciation (EBITDA)


292 

Loss before tax


(294) 

Net assets before VCT loans


4,561 

Net assets


3,061 


Green Highland Allt Ladaidh (1148) Ltd operates a 1,350 KW run-of-river hydro-electric power plant near Loch Garry, Invergarry in the Scottish Highlands.  The company earns Feed-in-Tariffs and other revenues from the generation and export of electricity to the National Grid.

 

Funding Path Ltd





Date of first investment

Cost £

Valuation £

Valuation Method

Income recognised by TP11 for the year  £'000

Equity Held by TP11 %

Equity Held by TPIM managed funds %

29-Jan-2016

1,000,000

1,000,000

Share of net assets

78

49.00

98.00








Summary of Information from Investee Company Financial Statements 2017:

£'000








Turnover


275 

Earnings before interest, tax, amortisation and depreciation (EBITDA)


268 

Profit before tax


41 

Net assets before VCT loans


3,232 

Net assets


32 


Funding Path Ltd is a VCT non-qualifying investment, which has invested in an LLP that provides finance to small and medium sized enterprises (SMEs).

 

Broadpoint 3 Ltd





Date of first investment

Cost £*

Valuation £

Valuation Method

Income recognised by TP11 for the year  £'000

Equity Held by TP11 %

Equity Held by TPIM managed funds %

08-Jan-2016

1,005,000

1,005,000

Discounted Cash Flow*

-  

0.00  

0.00  








Summary of Information from Investee Company Financial Statements 2017:

£'000








Turnover


Earnings before interest, tax, amortisation and depreciation (EBITDA)


(11) 

Loss before tax


(11) 

Net assets before VCT loans


2,995 

Net assets


(20) 


Broadpoint 3 Ltd owns equity stakes in hydro-electric power companies and one rooftop solar PV company.

 

*The directors consider the fair value to be equivalent to the par value.

 

Green Highland Allt Phocachain (1015) Ltd





Date of first investment

Cost £

Valuation £

Valuation Method

Income recognised by TP11 for the year  £'000

Equity Held by TP11 %

Equity Held by TPIM managed funds %

13-Nov-2014

858,000

1,008,000

Discounted Cash Flow

76

8

100








Summary of Information from Investee Company Financial Statements 2017:

£'000








Turnover


607 

Earnings before interest, tax, amortisation and depreciation (EBITDA)


408 

Loss before tax


(263) 

Net assets before VCT loans


4,006 

Net assets


2,569 


Green Highland Allt Phocachain (1015) Ltd operates two separate 500 KW run-of-river hydraulic power plants located in Glen Moriston, in the Scottish Highlands.  The company earns Feed-in-Tariffs from generation and export of electricity to the National Grid.

 

Green Highland Allt Luaidhe (228) Ltd





Date of first investment

Cost £

Valuation £

Valuation Method

Income recognised by TP11 for the year  £'000

Equity Held by TP11 %

Equity Held by TPIM managed funds %

18-Mar-2015

855,000

998,000

Discounted Cash Flow

74

15.08

100.00








Summary of Information from Investee Company Financial Statements 2017:

£'000








Turnover


275 

Earnings before interest, tax, amortisation and depreciation (EBITDA)


23 

Loss before tax


(306) 

Net assets before VCT loans


2,240 

Net assets


1,385 


Green Highland Allt Luaidhe (228) Ltd operates a 500 KW run-of-river hydro-electric power plant located in Knockie, Whitebridge near Inverness in the Scottish Highlands.  The company earns Feed-In-Tariffs from the generation and export of electricity to the National Grid.

 

Broadpoint 2 Ltd





Date of first investment

Cost £*

Valuation £

Valuation Method

Income recognised by TP11 for the year  £'000

Equity Held by TP11 %

Equity Held by TPIM managed funds %

07-Jan-2016

550,000

550,000

Discounted Cash Flow*

47

49.00

98.00








Summary of Information from Investee Company Financial Statements 2017:

£'000








Turnover


Earnings before interest, tax, amortisation and depreciation (EBITDA)


(11) 

Loss before tax


(20) 

Net assets before VCT loans


3,088 

Net assets


(17) 


Broadpoint 2 Ltd is a VCT non-qualifying investment, which has provided investment to hydro-electric power companies.

 

*The directors consider the fair value to be equivalent to the par value.

 

Significant Influence

 

The principal undertakings in which the company's interest at the year-end is 20% or more are as follows:

 

Name

Registered address

Holding




Broadpoint 2 Limited

18 St Swithin's Lane, London, EC4N 8AD

49.00%

Distributed Generators Limited

18 St Swithin's Lane, London, EC4N 8AD

45.00%

Funding Path Limited

18 St Swithin's Lane, London, EC4N 8AD

49.00%

Green Highland Alt Garbh Limited

Inveralmond Road, Inveralmond Industrial Estate, Perth, PH1 3TW

22.79%

Green Highland Shenval Limited

Q Court, 3 Quality Street, Edinburgh, EH4 5BP

22.09%

Green Peak Generation Limited

Q Court, 3 Quality Street, Edinburgh, EH4 5BP

41.67%

Modern Power Generation Limited

18 St Swithin's Lane, London, EC4N 8AD

49.90%

 

·      The investments are a combination of debt and equity.

·      Equity holding is equal to the voting rights.

·      All investments are held in the UK.

 

The Strategic Report has been approved by the Board and signed on their behalf by the Chairman.

 

 

Jane Owen

Chairman

17 May 2018

 

Report of the Directors

 

The Directors present their Report and the audited Financial Statements for the year ended 28 February 2018.

 

Details of Directors

 

Jane Owen is the Chairman of the Board of the Company. After graduating in law from Oxford University, Jane was called to the Bar in 1978 and until 1989 was a practising barrister in the chambers that are now 3 Verulam Buildings. Subsequently Jane became UK group legal director at Alexander & Alexander Services, and was appointed Aon's General Counsel in the UK in 1997, a position she held until 2008, where she was also a director of Aon Limited from 2001 to 2008. She is also a Non-Executive Director of TWG Europe Ltd and related companies and a Governor of James Allen's Girls' School.

 

Chad Murrin graduated in law from Cambridge University, and then qualified as a barrister. He worked for 3i Group plc from 1986-2004, the last five years as 3i's Corporate Development Director. In 2004, he set up his own corporate advisory business, Murrin Associates Limited. He holds the Advanced Diploma in Corporate Finance from The Corporate Finance Faculty of the ICAEW. He is a Non-Executive Director of Keytask Management Limited, E.W. Beard (Holdings) Limited, Procom-IM Limited and other companies.

 

Tim Clarke graduated in PPE from Oxford University. He joined Panmure Gordon & Co as an equities analyst, subsequently becoming a Partner and Head of Research. He joined Bass PLC in 1990, holding a number of operating roles in the Hotels, Pub and Restaurant divisions before becoming Chief Executive in 2000. Following its demerger he was Chief Executive of Mitchells & Butlers PLC until 2009. He was a Non-Executive Director of Associated British Foods PLC from 2004 until 2017. He is currently Chairman of Birmingham Airport, Chairman of Timothy Taylor & Co Ltd, and a Non-Executive Director of Hall & Woodhouse Ltd. He is Vice-Chairman of the Foundation of the Schools of King Edward VI in Birmingham. 

 

All Directors are considered to be independent.


The Board has considered provision B.7.2 of the UK Corporate Governance Code (April 2016) and believes that all the Directors continue to be effective and to demonstrate commitment to their roles, the Board and the Company. The Directors are discussed further within the Corporate Governance report on pages 27 and 28 which demonstrates the Boards compliance with the UK Corporate Governance code.

 

Activities and Status

 

The Company is a Venture Capital Trust and its main activity is investing. The Company has chosen to focus its investing activities towards companies involved in renewable energy, energy production and SME funding.

 

The Company has been approved as a VCT by HMRC and, in the opinion of the Directors, has conducted its affairs so as to enable it to continue to obtain such approval.

 

The Company is registered in England as a Public Limited Company (Registration number 07324448). The Directors have managed, and intend to continue to manage, the Company's affairs in such a manner as to comply with Section 274 of the Income Tax Act 2007 which grants approval as a VCT.

 

The Company was not at any time up to the date of this report a close company within the meaning of S439 of the Corporation Tax Act 2010.

 

Post Balance Sheet Events

 

For details of post balance sheet events see note 21 to the Financial Statements.

 

Directors' and Officers' Liability Insurance

 

The Company has, as permitted by S233 of the Companies Act 2006, maintained insurance cover on behalf of the Directors and Company Secretary, indemnifying them against certain liabilities which may be incurred by them in relation to their offices with the Company.

 

Report of the Directors

 

Matters Covered in the Strategic Report

 

Dividends and financial risk management have both been discussed within the Strategic Report on pages 4 and 10.

 

Management

TPIM acts as Investment Manager to the Company. The principal terms of the Company's management agreement with TPIM are set out in note 5 to the Financial Statements.

 

The Board has evaluated the performance of the Investment Manager based on the returns generated since taking on the management of the Fund and a review of the management contract and the services provided in accordance with its terms. As required by the Listing Rules, the Directors confirm that in their opinion the continuing appointment of TPIM as Investment Manager is in the best interests of the shareholders as a whole.  In reaching this conclusion the Directors have taken into account the performance of other VCTs managed by TPIM and the service provided by TPIM to the Company.

 

Substantial Shareholdings

 

As at the date of this report no disclosures of major shareholdings had been made to the Company under Disclosure and Transparency Rule 5 (Vote Holder and Issuer Notification Rules).

 

Global Greenhouse Gas Emissions

 

The Company has no greenhouse gas emissions to report from the operations of its Company, nor does it have responsibility for any other emission producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013.

 

Annual General Meeting

 

Notice convening the 2018 Annual General Meeting of the Company and a form of proxy in respect of that meeting can each be found at the end of this document.

 

Share Capital, Rights Attaching to the Shares and Restrictions on Voting and Transfer

 

The Ordinary Share capital was cancelled on 16 January 2018. The A Share capital is £100,000 divided into 10,000,000 shares of 1p each, of which 9,951,133 shares were in issue at 28 February 2018. The B Share capital is £100,000 divided into 10,000,000 shares of 1p each, of which 6,824,266 shares were in issue at 28 February 2018. As at that date none of the issued shares were held by the Company as treasury shares. Subject to any suspension or abrogation of rights pursuant to relevant law or the Company's articles of association, the shares confer on their holders (other than the Company in respect of any treasury shares) the following principal rights:

 

a) the right to receive out of profits available for distribution such dividends as may be agreed to be paid (in the case of a final dividend in an amount not exceeding the amount recommended by the Board as approved  by shareholders in general meeting or in the case of an interim dividend in an amount determined by the Board). All dividends unclaimed for a period of 12 years after having become due for payment are forfeited automatically and cease to remain owing by the Company;

 

b) the right, on a return of assets on a liquidation, reduction of capital or otherwise, to share in the surplus assets of the Company remaining after payment of its liabilities pari passu with other holders of A Shares of that class and B Shares of that class.

 

c) the right to receive notice of and to attend and speak and vote in person or on a poll by proxy at any general meeting of the Company. On a show of hands every member present or represented and voting has one vote and on a poll every member present or represented and voting has one vote for every share of which that member is the holder; the validly executed appointment of a proxy must be received not less than 48 hours before the time of the holding of the relevant meeting or adjourned meeting or, in the case of a poll taken otherwise than at or on the same day as the relevant meeting or adjourned meeting, be received after the poll has been demanded and not less than 24 hours before the time appointed for the taking of the poll.

 

These rights can be suspended. If a member, or any other person appearing to be interested in shares held by that member, has failed to comply within the time limits specified in the Company's articles of association with a notice pursuant to S793 of the Companies Act 2006 (notice by a Company requiring information about interests in its shares), the Company can, until the default ceases, suspend the right to attend and speak and vote at a general meeting and if the shares represent at least 0.25% of their class the Company can also withhold any dividend or other money payable in respect of the shares (without any obligation to pay interest) and refuse to accept certain transfers of the relevant shares.

 

Shareholders, either alone or with other shareholders, have other rights as set out in the Company's articles of association and in company law. (Principally, the Companies Act 2006).

 

A member may choose whether his or her shares are evidenced by share certificates (certificated shares) or held in electronic (uncertificated) form in CREST (the UK electronic settlement system). Any member may transfer all or any of his or her shares, subject in the case of certificated shares to the rules set out in the Company's articles of association or in the case of uncertificated shares to the regulations governing the operation of CREST (which allow the Directors to refuse to register a transfer as therein set out); the transferor remains the holder of the shares until the name of the transferee is entered in the register of members. The Directors may refuse to register a share transfer if it is in respect of a certificated share which is not fully paid up or on which the Company has a lien provided that, where the share transfer is in respect of any share admitted to the Official List maintained by the UK Listing Authority, any such discretion may not be exercised so as to prevent dealings taking place on an open and proper basis, or if in the opinion of the Directors (and with the concurrence of the UK Listing Authority) exceptional circumstances so warrant, provided that the exercise of such power will not disturb the market in those shares. Whilst there are no squeeze-out and sell out rules relating to the shares in the Company's articles of association, shareholders are subject to the compulsory acquisition provisions in S974 to S991 of the Companies Act 2006.

 

Amendment of Articles of Association

 

The Company's articles of association may be amended by the members of the Company by special resolution (requiring a majority of at least 75% of the persons voting on the relevant resolution).

 

Appointment and Replacement of Directors

 

A person may be appointed as a Director of the Company by the shareholders in general meeting by ordinary resolution (requiring a simple majority of the persons voting on the relevant resolution) or by the Directors. No person, other than a Director retiring by rotation or otherwise, shall be appointed or re-appointed a Director at any general meeting unless he is recommended by the Directors or, not less than seven nor more than 42 clear days before the date appointed for the meeting, notice is given to the Company of the intention to propose that person for appointment or re-appointment in the form and manner set out in the Company's articles of association.

 

Each Director who is appointed by the Directors (and who has not been elected as a Director of the Company by the members at a general meeting held in the interval since his appointment as a Director of the Company) is to be subject to election as a Director of the Company by the members at the first Annual General Meeting of the Company following his or her appointment. At each Annual General Meeting of the Company one third of the Directors for the time being, or if their number is not three or an integral multiple of three the number nearest to but not exceeding one-third, are to be subject to re-election.

 

The Companies Act allows shareholders in general meeting by ordinary resolution (requiring a simple majority of the persons voting on the relevant resolution) to remove any Director before the expiring of his or her period of office, but without prejudice to any claim for damages which the Director may have for breach of any contract of service between him or her and the Company.

 

A person also ceases to be a Director if he or she resigns in writing, ceases to be a Director by virtue of any provision of the Companies Act, becomes prohibited by law from being a Director, becomes bankrupt or is the subject of a relevant insolvency procedure, or becomes of unsound mind, or if the Board so decides following at least six months' absence without leave or if he or she becomes subject to relevant procedures under the mental health laws, as set out in the Company's articles of association.

 

Powers of the Directors

 

Subject to the provisions of the Companies Act, the memorandum and articles of association of the Company and any directions given by shareholders by special resolution, the articles of association specify that the business of the Company is to be managed by the Directors, who may exercise all the powers of the Company, whether relating to the management of the business or not. In particular, the Directors may exercise on behalf of the Company its powers to purchase its own shares to the extent permitted by shareholders.

 

Directors Responsibilities

 

The Directors confirm that: 

 

·      so far as each of the Directors is aware there is no relevant audit information of which the Company's auditor is unaware; and

·      the Directors have taken all steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

 

Auditor

 

Grant Thornton UK LLP resigned as the company's auditor during the year following the conclusion of a formal tender process led by the Company's audit committee. The directors appointed BDO LLP to fill the casual vacancy. BDO LLP will offer themselves for appointment as auditor in accordance with S489(4) of the Companies Act 2006. A resolution to appoint BDO LLP as auditor and to authorise the Directors to fix their remuneration will be proposed at the forthcoming annual General Meeting.

 

On behalf of the Board.

 

                                                                                            

Jane Owen

Director

17 May 2018

 

Directors' Responsibility Statement

 

The Directors are responsible for preparing the Strategic Report, the Directors' Report, the Directors' Remuneration Report and the Financial Statements in accordance with applicable law and regulations.

 

Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors have elected to prepare the Financial Statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company for that year. In preparing these Financial Statements, the Directors are required to:

 

·      select suitable accounting policies and then apply them consistently;

·      make judgments and accounting estimates that are reasonable and prudent;

·      state whether applicable IFRS have been followed, subject to any material departures disclosed and explained in the Financial Statements; and

·      prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements and the Remuneration report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

The Directors are responsible for preparing the Annual Report in accordance with applicable law and regulations. The Directors consider the Annual Report and the Financial Statements, taken as a whole, provide the information necessary to assess the Company's position, performance, business model and strategy and are fair, balanced and understandable.

 

The Company's Financial Statements are published on the TPIM website, www.triplepoint.co.uk. The maintenance and integrity of this website is the responsibility of TPIM and not of the Company.  Legislation in the United Kingdom governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions. 

 

To the best of our knowledge:

 

·      The Financial Statements, prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

 

·      The Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

 

On behalf of the Board.

Jane Owen
Chairman
17 May 2018

 

Corporate Governance

 

This Corporate Governance Report forms part of the Directors' Report on pages 22-25.

 

The Financial Conduct Authority requires all listed companies to disclose how they have applied the principles and complied with the provisions of the UK Corporate Governance Code (the 'Code') issued by the Financial Reporting Council (FRC) in 2016.

 

The Board of Triple Point VCT 2011 plc has considered the principles and recommendations of the Association of Investment Companies Code of Corporate Governance (AIC Code 2016) by reference to the Association of Investment Companies Corporate Governance Guide for Investment Companies (AIC Guide).  The AIC Code 2016, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code (April 2016), as well as setting out additional principles and recommendations on issues that are of specific relevance to the Company.

 

The Board considers that reporting against principles and recommendations of the AIC Code 2016, by reference to the AIC Guide, which incorporates the UK Corporate Governance Code (April 2016), will provide improved reporting to shareholders. The Company has complied with the recommendations of the AIC Code and the relevant provisions of the code, except as set out on page 31 under the heading Compliance Statement.

 

The Company is committed to maintaining high standards in corporate governance and has complied with the recommendations of the AIC Code 2016 and the relevant provisions of the UK Corporate Governance Code (April 2016), except as set out at the end of this report in the Compliance Statement.

 

Board of Directors

 

The Company has a Board of three Non-Executive Directors. Since all Directors are Non-Executive and day-to-day management responsibilities are sub-contracted to the Investment Manager, the Company does not have a Chief Executive Officer.  The Directors have a range of business and financial skills which are relevant to the Company; these are described on page 22 of this report. Directors are provided with key information on the Company's activities, including regulatory and statutory requirements, by the Investment Manager. The Board has direct access to company secretarial advice and compliance services provided by the Investment Manager which is responsible for ensuring that Board procedures are followed and applicable regulations complied with. All Directors are able to take independent professional advice in furtherance of their duties.

 

Any appointment of new Directors to the Board is conducted, and appointments made, on merit and with due regard for the benefits of diversity on the Board, including gender. All Directors are able to allocate sufficient time to the Company to discharge their responsibilities.

The Board meets regularly on a quarterly basis, and on other occasions as required, to review the investment performance and monitor compliance with the investment policy laid down by the Board. There is a formal schedule of matters reserved for Board decision and the agreement between the Company and the Manager has authority limits beyond which Board approval must be sought.

 

The Investment Manager has authority over the management of the investment portfolio, the organisation of custodial services, accounting, secretarial and administrative services. In practice the Investment Manager makes investment recommendations for the Board's approval. In addition all investment decisions involving other VCTs managed by the Investment Manager are taken by the Board rather than the Investment Manager. Other matters reserved for the Board include:

•     The consideration and approval of future developments or changes to the investment policy, including risk and asset allocation;

•     consideration of corporate strategy;

•     approval of any dividend  or return of capital to be paid to the shareholders;

•     the appointment, evaluation, removal and remuneration of the Investment Manager;

•     the performance of the Company, including monitoring the net asset value  per share; and

•    monitoring shareholder profiles and considering shareholder communications.

 

The Chairman leads the Board in the determination of its strategy and in the achievement of its objectives.  The Chairman is responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda and has no involvement in the day to day business of the Company.  She facilitates the effective contribution of the Directors and ensures that they receive accurate, timely and clear information and that they communicate effectively with shareholders. The Chairman does not have significant commitments conflicting with her obligations to the Company.

 

The Company Secretary is responsible for advising the Board on all governance matters.  All of the Directors have access to the advice and services of the Company Secretary which has administrative responsibility for the meetings of the Board and its committees.  Directors may also take independent professional advice at the Company's expense where necessary in the performance of their duties.  As all of the Directors are Non-Executive, it is not considered appropriate to identify a member of the Board as the senior Non-Executive Director of the Company.

 

The Company's articles of association and the schedule of matters reserved to the Board for decision provide that the appointment and removal of the Company Secretary is a matter for the full Board.

 

The Company's articles of association require that one third of the Directors should retire by rotation each year and seek re-election at the Annual General Meeting and that Directors newly appointed by the Board should seek re-appointment at the next Annual General Meeting.  The Board complies with the requirement of the UK Corporate Governance Code (April 2016) that all Directors are required to submit themselves for re-election at least every three years.

 

During the period covered by these Financial Statements the following meetings were held:

 

Directors present

4 Full Board

2 Audit Committee


Meetings

Meetings

Jane Owen, Chairman

4

2

Chad Murrin

4

2

Tim Clarke

4

2

 

Audit Committee

 

The Board has appointed an audit committee of which Jane Owen is Chairman, which deals with matters relating to audit, financial reporting and internal control systems. The Committee meets as required and has direct access to BDO LLP, the Company's auditor.

 

The audit committee safeguards the objectivity and independence of the auditor by reviewing the nature and extent of non-audit services supplied by the external auditor to the Company. BDO LLP do not provide any non-audit services to the company.

 

When considering whether to recommend the reappointment of the external auditor the audit committee takes into account their current fee tender compared to the external audit fees paid by other similar companies. The audit committee will then recommend to the Board the appointment of an external auditor which is ratified at the Annual General Meeting.

 

The FRC's Ethical Standard requires the audit partner to rotate every five years. During the year an audit tender process was undertaken. This resulted in the resignation of Grant Thornton UK LLP and the directors appointing BDO LLP to fill the casual vacancy.

 

The effectiveness of the external audit is assessed as part of the Board evaluation conducted annually and by the quality and content of the audit plan provided to the audit committee by the external auditor and the discussions then held on topics raised. The audit committee will challenge the external auditor at the audit committee meeting if appropriate.

 

The Audit Committee's terms of reference include the following roles and responsibilities:

·      reviewing and making recommendations to the Board in relation to the Company's published Financial Statements and other formal announcements or regulatory returns relating to the Company's financial performance, reviewing significant financial reporting judgements contained in them;

·      reviewing and making recommendations to the Board in relation to the Company's internal control (including internal financial control) and risk management systems;

·      periodically considering the need for an internal audit function;

·      making recommendations to the Board in relation to the appointment, re-appointment and removal of the external auditor and approving the remuneration and terms of engagement of the external auditor;

·      reviewing and monitoring the external auditor's independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional regulatory requirements;

·      monitoring the extent to which the external auditor is engaged to supply non-audit services; and

·      ensuring that the Investment Manager has arrangements in place for the investigation and follow-up of any concerns raised confidentially by staff in relation to propriety of financial reporting or other matters.

 

The committee reviews its terms of reference and effectiveness annually and recommends to the Board any changes required as a result of the review.  The terms of reference are available on request from the Company Secretary.

 

The Board considers that the members of the committee collectively have the skills and experience required to discharge their duties effectively, and that the Chairman of the committee meets the requirements of the UK Corporate Governance Code (April 2016) as to relevant financial experience.

 

The Company does not have an independent internal audit function as it is not deemed appropriate given the size of the Company  and the nature of the Company's business.  However, the committee considers annually whether there is a need for such a function and, if there were, would recommend it be established.

 

In respect of the year ended 28 February 2018, the audit committee discharged its responsibilities by:

 

·      conducting a formal audit tender process and making a recommendation to the board in relation to the removal of Grant Thornton UK LLP and the appointment and approval of remuneration and terms of engagement of BDO LLP;

·      reviewing the external auditor's plan for the audit of the Financial Statements, including identification of key risks and confirmation of auditor independence;

·      reviewing TPIM's statement of internal controls operated in relation to the Company's business and assessing those controls in minimising the impact of key risks;

·      reviewing periodic reports on the effectiveness of TPIM's compliance procedures;

·      reviewing the appropriateness of the Company's accounting policies;

·      reviewing the Company's half-yearly results and draft annual Financial Statements prior to Board approval;

·      reviewing the external auditor's audit plan document to the audit committee on the annual Financial Statements; and

·      reviewing the Company's going concern status.

 

The audit committee is responsible for considering and reporting on any significant issues that arise in relation to the Financial Statements.

 

The key areas of risk that have been identified and considered by the audit committee in relation to the business activities and the Financial Statements of the Company are as follows:

·     valuation and existence of unquoted investments; and

·    compliance with HM Revenue & Customs conditions for maintenance of approved Venture Capital Trust status.

 

The audit committee relies on the Investment Manager to assess the valuation of unquoted investments and the existence of those investments. The Investment Manager has a director on the board of all the investee companies and meets regularly with the other directors and hence has an oversight of all the investments made. The audit committee have reviewed the valuations and discussed them with both the Investment Manager and the external auditor to confirm their assessment of the valuation of the unquoted investments and the existence of those investments.

 

The Investment Manager has confirmed to the audit committee that the conditions for maintaining the Company's status as an approved Venture Capital Trust had been complied with throughout the year. The position has been reviewed by Philip Hare & Associates LLP in its capacity as adviser to the Company on taxation matters.

 

The audit committee has considered the whole Report and Accounts for the year ended 28 February 2018 and has reported to the Board that it considers them to be fair, balanced and understandable providing the information necessary for shareholders to assess the Company's position, performance, business model and strategy.

 

Internal Control

 

The Directors have overall responsibility for keeping under review the effectiveness of the Company's systems of internal controls. The purpose of these controls is to ensure that proper accounting records are maintained, the Company's assets are safeguarded and the financial information used within the business and for publication is accurate and reliable; such a system can only provide reasonable and not absolute assurance against material misstatement or loss. The system of internal controls is designed to manage rather than eliminate the risk of failure to achieve business objectives. As part of this process an annual review of the internal control systems is carried out. The review covers all material controls including financial, operational and risk management systems. The Directors regularly review financial results and investment performance with the Investment Manager.

 

The Directors have established an ongoing process designed to meet the particular needs of the Company in identifying, evaluating and managing risks to which it is exposed. The process adopted is one whereby the Directors identify the risks to which the Company is exposed including, among others, market risk, VCT qualifying investment risk and operational risks which are recorded on a risk register. The controls employed to mitigate these risks are identified and the residual risks are rated taking into account the impact of the mitigating factors. The risk register is updated twice a year.

 

TPIM is engaged to provide administrative (including accounting) services and retains physical custody of the documents of title relating to investments.

 

The Directors regularly review the system of internal controls, both financial and non-financial, operated by the Company and the Investment Manager. These include controls designed to ensure that the Company's assets are safeguarded and that proper accounting records are maintained.

 

Internal control systems include the production and review of quarterly bank reconciliations and management accounts.

 

The Investment Manager's procedures are subject to internal compliance checks.

 

Capital management is monitored and controlled by the Investment Manager. The capital being managed includes equity and fixed interest VCT qualifying investments, cash balances and liquid resources including debtors and creditors.

 

The Company's objectives when managing capital are:

·      to safeguard its ability to continue as a going concern, so that it can continue to provide returns to shareholders and benefits for other stakeholders;

·      to ensure sufficient liquid resources are available to meet the funding requirements of its investments and to fund new investments where identified.

 

Going Concern

 

After making the necessary enquiries, the Directors confirm that they are satisfied that the Company has adequate resources to continue in business for at least the next 12 months. The Board receives regular reports from the Manager and the Directors believe that, as no material uncertainties leading to significant doubt about going concern

 

have been identified, it is appropriate to continue to apply the going concern basis in preparing the Financial Statements.  

 

Relations with Shareholders

 

The Board recognises the value of maintaining regular communications with shareholders. In addition to the formal business of the Annual General Meeting, an opportunity is given to all shareholders to question the Board and the Investment Manager on matters relating to the Company's operation and performance. The Board and the Investment Manager will also respond to any written queries made by shareholders during the course of the year and both can be contacted at 18 St Swithin's Lane, London, EC4N 8AD or on 020 7201 8989.

 

Compliance Statement

 

The Listing Rules require the Board to report on compliance with the UK Corporate Governance Code (April 2016) provisions throughout the accounting period. With the exception of the limited items outlined below, the Directors consider that the Company has complied throughout the period under review with the provisions set out in the UK Corporate Governance Code (April 2016).

 

1.  New Directors do not receive a full, formal and tailored induction on joining the Board. Such matters are addressed on an individual basis as they arise (B.4.1).

 

2.  Due to the size of the Board and the nature of the Company's business, a formal performance evaluation of the Board, its committees, the individual Directors and the Chairman has not been undertaken. Specific performance issues are dealt with as they arise (B.6.1, B.6.3).

 

3.  The Company does not have a senior independent director. The Board does not consider such an appointment appropriate for the Company (A.4.1).

 

4. The Company conducts a formal review as to whether there is a need for an internal audit function. The Directors do not consider that an internal audit would be an appropriate control for a Venture Capital Trust (C.3.6).

 

5.  As all the Directors are Non-Executive, it is not considered appropriate to appoint a Nomination or Remuneration Committee (B.2.1 and D.2.1).

 

6.  The Audit committee includes three Non-Executive Directors, all of whom are considered independent. Jane Owen who is chairman is also chairman of the audit committee but it is not considered appropriate to appoint another independent Director. The Board regularly reviews the independence of its Directors (C.3.1).

 

On behalf of the Board.

 

Jane Owen

Chairman 

17 May 2018

 

Directors' Remuneration Report

 

Introduction

 

This report is submitted in accordance with schedule 8 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008, in respect of the year ended 28 February 2018.  This report also meets the Financial Conduct Authority's Listing Rules and describes how the Board has applied the principles relating to Directors' remuneration set out in UK Corporate Governance Code (issued April 2016). The reporting requirements require two sections to be included, a Policy Report and an Annual Remuneration Report which are presented below.

 

Directors' Remuneration Policy Report

 

This statement of the Directors' Remuneration Policy took effect following approval by shareholders at the Annual General Meeting on 13 July 2017. The Board currently comprises three Directors, all of whom are Non-Executive. The Board does not have a separate remuneration committee, as the Company has no employees or executive directors. The Board has not retained external advisers in relation to remuneration matters but has access to information about Directors' fees paid by other companies of a similar size and type. No views which are relevant to the formulation of the Directors' remuneration policy have been expressed to the Company by shareholders, whether at a general meeting or otherwise.

 

The Board's policy is that the remuneration of Non-Executive Directors should reflect the experience of the Board as a whole, be fair and be comparable with that of other relevant Venture Capital Trusts that are similar in size and have similar investment objectives and structures. Furthermore, the level of remuneration should be sufficient to attract and retain the Directors needed to oversee the Company properly and to reflect the specific circumstances of the Company, the duties and responsibilities of the Directors and the value and amount of time committed to the Company's affairs. The articles of association provide that the Directors shall be paid in aggregate a sum not exceeding £100,000 per annum. None of the Directors are eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits in respect of their services as Non-Executive Directors of the Company.

 

The articles of association provide that Directors shall retire and be subject to re-election at the first Annual General Meeting after their appointment and that any Director who has not been re-elected for three years shall retire and be subject to re-election at the Annual General Meeting. Also any Director not considered independent shall retire each year and offer himself for re-election at the Annual General Meeting.  The Directors' service contracts provide for an appointment of 12 months, after which three months written notice must be given by either party. A Director who ceases to hold office is not entitled to receive any payment other than accrued fees (if any) for past services. The same policies will apply if a new Director is appointed.

 

Details of each Director's contract is shown below. The Chairman is paid more than the other Directors to reflect the additional responsibilities of that role. There are no other fees payable to the Directors for additional services outside of their contracts.

 






Date of Contract

Unexpired term of contract

Annual rate of  Directors' fees

Policy on payment for loss of office




£


Jane Owen, Chairman

23-Sep-10

none

17,500

none

Chad Murrin

23-Sep-10

none

15,000

none

Tim Clarke

05-May-11

none

15,000

none






 

Annual Remuneration Report

 

The remuneration policy described above was approved on 13 July 2017 at the Annual General Meeting and will remain unchanged for another three year period. The Board will review the remuneration of the Directors in line with the VCT industry on an annual basis, if thought appropriate.  Otherwise, only a change in role is likely to incur a change in remuneration of any one Director.

Directors' Remuneration (audited information)

The fees paid to Directors in respect of the year ended 28 February 2018 and the prior year are shown below:

 



Emoluments for the Year ended 28 February 2018

Emoluments for the year ended 28 February 2017



£  

£  

Jane Owen, Chairman


17,500

17,269

Chad Murrin


15,000

14,769

Tim Clarke


15,000

14,769



47,500

46,807

Employers' NI contributions


175

101

Total Emoluments


47,675

46,908

 

None of the Directors are eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits in respect of their services as Non-Executive Directors of the Company.

 

Information required on executive Directors, including the Chief Executive Officer and employees has been omitted because the Company has neither and therefore it is not relevant.

 

Directors' emoluments compared to payments to shareholders:

 

 Unaudited


 28 February 2018

 28 February 2017



£'000

£'000





Total Dividends paid

2,495

4,884

Total Directors' emoluments

48

47





 

Directors' Share Interests (audited information)

 

At the 28 February 2018 Jane Owen held no Ordinary Shares, 24,624 A Ordinary Shares and 24,378 B Ordinary Shares (2017: 25,375 Ordinary Shares; 24,624 A Ordinary Shares; B Shares 24,378) and Tim Clarke held no Ordinary Shares and 24,624 B Shares (2017: 15,300 Ordinary Shares; B Shares 24,624) and Chad Murrin held 24,874 A Ordinary Shares and 24,624 B Ordinary Shares (2017: 24,874 A Ordinary Shares; B Shares 24,624). At 28 February 2018 Jane Owen's husband held no Ordinary Shares (2017: 25,375). No other connected parties to the Directors held any shares at 28 February 2018 (2017: nil). Any shares owned by the Directors were purchased at the same price offered to investors. There are no requirements or restrictions on Directors holding shares in the Company.

 

Statement of Voting at the Annual General Meeting

 

The 2017 Remuneration Report was presented to the Annual General Meeting in July 2017 and received shareholder approval following a vote 99% in favour and none abstained.

 

The 2017 Remuneration Policy was presented to the Annual General Meeting in July 2017 and received shareholder approval following a vote 99% in favour and none abstained.

 

Statement of the Chairman

 

The Directors' fees were £17,500 per annum for the Chairman and £15,000 per annum for other Directors from 5 April 2016. The remuneration of the Directors reflects the experience of the Board as a whole, is fair and comparable with that of other relevant Venture Capital Trusts that are similar in size and have similar investment objectives and structures.

 

On behalf of the Board.

 

Jane Owen

Chairman 

17 May 2018

 

 

 

 

 

 

Statement of Comprehensive Income

For the year ended 28 February 2018

 



Year ended


Year ended



28 February 2018


28 February 2017


Note

Revenue

Capital

Total


Revenue

Capital

Total



£'000

£'000

£'000


£'000

£'000

£'000










Investment income

4

715

-  

715


1,437

-  

1,437

Loss arising on the realisation of investments during the period

10/11

-  

(17)

(17)


-  

(429)

(429)

Gain/(loss) arising on the revaluation of investments at the period end

10

-  

264

264


-  

(18)

(18)

Investment return


715

247

962


1,437

(447)

990

Investment management fees

5

24

8

32


285

94

379

Financial and regulatory costs


26

-  

26


28

-  

28

General administration


42

(19)

23


49

70  

119

Legal and professional fees

6

38

(2)

36


69

-  

69

Directors' remuneration

7

48

-  

48


47

-  

47

Operating expenses


178

(13)

165


478

164

642

Profit/(loss) before taxation


537

260

797


959

(611)

348

Taxation

8

(102)

(2)

(104)


(73)

72

(1)

Profit/(loss) after taxation


435

258

693


886

(539)

347

Other comprehensive income


-  

-  

-  


-  

-  

-  

Profit and total comprehensive income/(loss) for the period


435

258

693


886

(539)

347

 

Basic & diluted earnings per share (pence)

 















Ordinary Share

9

(0.04p)

0.01p

(0.03p)


2.71p

(2.65p)

0.06p










A Share

9

4.44p

2.39p

6.83p


3.61p

(0.08p)

3.53p










B Share

9

(0.01p)

0.25p

0.24p


(0.37p)

0.10p

(0.27p)

 

The total column of this statement is the Statement of Comprehensive Income of the Company prepared in accordance with International Financial Reporting Standards (IFRS). The supplementary revenue return and capital columns have been prepared in accordance with the Association of Investment Companies Statement of Recommended Practice (AIC SORP) in so far as it does not conflict with IFRS.

 

All revenue and capital items in the above statement derive from continuing operations.

 

This Statement of Comprehensive Income includes all recognised gains and losses.

 

The accompanying notes on pages 51 to 64 form an integral part of these statements.

 

Balance Sheet

At 28 February 2018

Company No: 07324448

 

 



28 February 2018


28 February 2017


Note

£'000


£'000






Non-current assets





Financial assets at fair value through profit or loss

10

16,554


16,593






Current assets





Assets held for sale

11

-  


191

Receivables

12

779


1,375

Cash and cash equivalents

13

353


1,525



1,132


3,091

Total assets


17,686


19,684






Current liabilities





Payables and accrued expenses

14

120


215

Current taxation payable


103


1



223


216

Net assets


17,463


19,468






Equity attributable to equity holders





Share capital

15

168


371

Share Premium


16,683


16,683

Share redemption reserve


-  


1

Special distributable reserve


-  


255

Capital reserve


319


1,443

Revenue reserve


293


715

Total equity


17,463


19,468






 

Shareholders' funds










Net asset value per Ordinary Share

17

-  


11.32p






Net asset value per A Share

17

106.90p


104.07p






Net asset value per B Share

17

100.00p


99.76p

 

The statements were approved by the Directors and authorised for issue on 17 May 2018 and are signed on their behalf by:

 

Jane Owen

Chairman

17 May 2018

 

The accompanying notes on pages 51 to 64 form an integral part of these statements.

Statement of Changes in Shareholders' Equity

For the year ended 28 February 2018

 


Issued Capital

Share Premium

Share Redemption Reserve

Special Distributable Reserve

Capital Reserve

Revenue Reserve

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000









Year ended 28 February 2018








Opening balance

371

16,683

1

255

1,443

715

19,468

Issue of share capital

-  

-  

-  

-  

-  

-  

-  

Cost of issue of shares

-  

-  

-  

-  

-  

-  

-  

Purchase of own shares

-  

-  

-  

-  

-  

-  

-  

Cancellation of shares

(203)

-  

(1)

-  

1

-  

(203)

Dividends paid

-  

-  

-  

(255)

(1,383)

(857)

(2,495)

Transactions with owners

(203)

-  

(1)

(255)

(1,382)

(857)

(2,698)

(Loss)/profit before taxation

-  

-  

-  

-  

260

537

797

Taxation

-  

-  

-  

-  

(2)

(102)

(104)

(Loss)/profit after taxation

-  

-  

-  

-  

258

435

693

Other comprehensive income

-  

-  

-  

-  

-  

-  

-  

Total comprehensive (loss)/profit for the period

-  

-  

-  

-  

258

435

693

Balance at 28 February 2018

168

16,683

-  

-  

319

293

17,463

The Capital Reserve consists of:








Investment holding gains





320



Other realised losses




(1)








319



Year ended 28 February 2017








Opening balance

303

9,927

1

4,900

1,982

68

17,181

Issue of share capital

68

6,904

-  

-  

-  

-  

6,972

Cost of issue of shares

-  

(148)

-  

-  

-  

-  

(148)

Dividend Paid

-  

-  

-  

(4,645)

-  

(239)

(4,884)

Transactions with owners

68

6,756

-  

(4,645)

-  

(239)

1,940

(Loss)/profit after taxation

-  

-  

-  

-  

(539)

886

347

Total comprehensive (loss)/profit for the period

-  

-  

-  

-  

(539)

886

347

Balance at 28 February 2017

371

16,683

1

255

1,443

715

19,468

 

The capital reserve represents the proportion of Investment Management fees charged against capital and realised/unrealised gains or losses on the disposal/revaluation of investments. The unrealised capital reserve is not distributable. The special distributable reserve was created on court cancellation of the share premium account. The revenue reserve, realised capital reserve and special distributable reserve are distributable by way of dividend.

 

At 28 February 2018 the total reserves available for distribution are £292,363. This consists of the distributable revenue reserve net of the realised capital loss.

 

Statement of Cash Flows

For the year ended 28 February 2018

 


Year ended

Year ended

28 February 2018


28 February 2017


£'000


£'000





Cash flows from operating activities




Profit before taxation

797


348

Loss arising on the disposal of investments during the period

17


429

(Gain)/loss arising on the revaluation of investments at the period end

(264)


18

Cash generated by operations

550


795

Decrease/(increase) in receivables

596


(424)

(Decrease)/increase in payables

(97)


93

Net cash flows from operating activities

1,049


464

Cash flows from investing activities




Purchase of financial assets at fair value through profit or loss

-  


(5,850)

Sales of financial assets at fair value through profit or loss

477


4,634

Net cash flows from investing activities

477


(1,216)

Cash flows from financing activities




Issue of shares

-  


6,824

Distribution of proceeds from share cancellation

(203)


-  

Dividends paid

(2,495)


(4,884)

Net cash flows from financing activities

(2,698)


1,940

Net (decrease)/increase in cash and cash equivalents

(1,172)


1,188

Reconciliation of net cash flow to movements in cash and cash equivalents




Cash and cash equivalents at 1 March 2017

1,525


337

Net (decrease)/increase in cash and cash equivalents

(1,172)


1,188

Cash and cash equivalents at 28 February 2018

353


1,525

 

The accompanying notes on pages 51 to 64 form an integral part of these statements.

 

Unaudited Non-Statutory Analysis of - The Ordinary Share Fund

 

Statement of Comprehensive Income






Year ended 28 February 2018


Year ended 28 February 2017



Revenue

Capital

Total


Revenue

Capital

Total



£'000

£'000

£'000


£'000

£'000

£'000

Investment income


(1)

-  

(1)


685

-  

685

Realised (loss) on investments


-  

(17)

(17)


-  

(429)

(429)

Unrealised (loss) on investments


-  

-  

-  


-  

(74)

(74)

Investment return


(1)

(17)

(18)


685

(503)

182

Investment management fees


(2)

19

17


(80)

(92)

(172)

Other expenses


(5)

4

(1)


(66)

-  

(66)

(Loss)/profit before taxation


(8)

6

(2)


539

(595)

(56)

Taxation


2

(4)

(2)


11

57

68

(Loss)/profit after taxation


(6)

2

(4)


550

(538)

12

Profit and total comprehensive (loss)/income for the year


(6)

2

(4)


550

(538)

12

Basic and diluted (loss)/earnings per share


(0.04p)

0.01p

(0.03p)


2.71p

(2.65p)

0.06p








Balance Sheet


28 February 2018


28 February 2017





£'000




£'000

Non-current assets









Financial assets at fair value through profit or loss




-  




5










Current assets









Assets held for sale




-  




191

Receivables




-  




674

Corporation tax




-  




68

Cash and cash equivalents




-  




1,448





-  




2,381

Current liabilities









Payables




-  




(82)

Net assets




-  




2,304










Equity attributable to equity holders



-  




2,304

Net asset value per share




-   




11.32p

Statement of Changes in Shareholders' Equity


















28 February 2018



28 February 2017





£'000




£'000

Opening shareholders' funds




2,304




7,176

Cancellation of shares




(203)




-  

(Loss)/profit for the year




(4)




12

Dividend paid




(2,097)




(4,884)

Closing shareholders' funds




-  




2,304

 

Unaudited Non-Statutory Analysis of - The Ordinary Share Fund

 





Investment Portfolio

28 February 2018


28 February 2017


        Cost 

     Valuation


        Cost 

     Valuation


£'000

£'000


£'000

£'000

Unquoted qualifying holdings

-  

-  

-  

-  


300

17.16

191

11.62

Non-Qualifying holdings

-  

-  

-  

-  


-  

-  

5

0.30

Financial assets at fair value through profit or loss

-  

-  

-  

-  


300

17.16

196

11.92

Cash and cash equivalents

-  

-  

-  

-  


1,448

82.84

1,448

88.08


-  

-  

-  

-  


1,748

100.00

1,644

100.00

Qualifying Holdings










Unquoted










Cinema Digitisation










DLN Digital Ltd

-  

-  

-  

-  


300

17.16

191

11.62


-  

-  

-  

-  


300

17.16

191

11.62

Non-Qualifying Holdings










Unquoted










Other










Broadpoint Ltd

-  

-  

-  

-  


-  

-  

5

0.30


-  

-  

-  

-  


-  

-  

5

0.30

 

Unaudited Non-Statutory Analysis of - The A Share Fund

 

Statement of





Comprehensive Income


Year ended 28 February 2018


Year ended 28 February 2017



Revenue

Capital

Total


Revenue

Capital

Total



£'000

£'000

£'000


£'000

£'000

£'000

Investment income


634

-  

634


663

-  

663

Unrealised gain on investments


-  

240

240


-  

30

30

Investment return


634

240

874


663

30

693

Investment management fees


(22)

-  

(22)


(163)

(47)

(210)

Other expenses


(67)

(2)

(69)


(52)

-  

(52)

Profit/(loss) before taxation


545

238

783


448

(17)

431

Taxation


(104)

-  

(104)


(90)

10

(80)

Profit/(loss) after taxation


441

238

679


358

(7)

351

Profit and total comprehensive income/(loss) for the year


441

238

679


358

(7)

351

Basic and diluted earnings/(loss) per share


4.44p

2.39p   

6.83p


3.61p

(0.08p)

3.53p








Balance Sheet


28 February 2018


28 February 2017





£'000




£'000

Non-current assets









Financial assets at fair value through profit or loss




9,744




9,802










Current assets









Receivables




764




678

Cash and cash equivalents




274




29





1,038




707

Current liabilities









Payables




(40)




(73)

Corporation Tax




(105)




(80)

Net assets




10,637




10,356










Equity attributable to equity holders


10,637




10,356

Net asset value per share




106.90p




104.07p

Statement of Changes in Shareholders' Equity


















28 February 2018



28 February 2017





£'000




£'000

Opening shareholders' funds




10,356




10,005

Profit for the year




679




351

Dividend paid




(398)




-  

Closing shareholders' funds




10,637




10,356

 


28 February 2018


28 February 2017


        Cost 

     Valuation


        Cost 

     Valuation


£'000

£'000


£'000

£'000

Unquoted qualifying holdings

6,323

64.86

6,577

65.65


6,323

64.51

6,335

64.44

Non-Qualifying holdings

3,151

32.33

3,167

31.61


3,449

35.18

3,467

35.27

Financial assets at fair value through profit or loss

9,474

97.19

9,744

97.26


9,772

99.69

9,802

99.71

Cash and cash equivalents

274

2.81

274

2.74


29

0.31

29

0.29


9,748

100.00

10,018

100.00


9,801

100.00

9,831

100.00

Qualifying Holdings










Unquoted










Hydro Electric Power










Green Highland  Allt Choire A Bhalachain Ltd

30

0.31

30

0.30


30

0.31

29

0.29

Green Highland Allt Garbh Ltd

2,250

23.08

2,250

22.46


2,250

22.96

2,250

22.89

Green Highland Allt Ladaidh (1148) Ltd

1,470

15.08

1,802

17.99


1,470

15.00

1,470

14.95

Green Highland Allt Luaidhe (228) Ltd

855

8.77

937

9.35


855

8.72

877

8.92

Green Highland Allt Phocachain (1015) Ltd

858

8.80

1,005

10.03


858

8.75

849

8.64

Green Highland Shenval Ltd

860

8.82

553

5.52


860

8.77

860

8.75


6,323

64.86

6,577

65.65


6,323

64.51

6,335

64.44
















28 February 2018


28 February 2017


        Cost 

     Valuation


        Cost 

     Valuation

Non-Qualifying Holdings

£'000

£'000


£'000

£'000

Unquoted










Hydro Electric Power










Green Highland  Allt Choire A Bhalachain Ltd

3

0.03

3

0.03


3

0.03

3

0.03

Green Highland Allt Ladaidh (1148) Ltd

30

0.31

30

0.30


30

0.31

30

0.31

Green Highland Allt Luaidhe (228) Ltd

61

0.63

61

0.61


61

0.62

61

0.62

Green Highland Allt Phocachain (1015) Ltd

2

0.02

3

0.03


3

0.03

3

0.03

Kinlochteacius Hydro Ltd

-  

-  

-  

-  


47

0.48

47

0.48

SME Funding:










Hydro Electric Power










Broadpoint 2 Ltd

550

5.64

550

5.49


800

8.16

800

8.14

Broadpoint 3 Ltd

1,005

10.31

1,005

10.03


1,005

10.25

1,005

10.22

Other










Funding Path Ltd

1,000

10.26

1,000

9.98


1,000

10.20

1,010

10.27

Modern Power Generation Ltd

500

5.13

515

5.14


500

5.10

508

5.17


3,151

32.33

3,167

31.61


3,449

35.18

3,467

35.27

 

Unaudited Non-Statutory Analysis of - The B Share Fund

 

Statement of





Comprehensive Income


Year ended 28 February 2018


Year ended 28 February 2017



Revenue

Capital

Total


Revenue

Capital

Total



£'000

£'000

£'000


£'000

£'000

£'000

Investment income


82

-  

82


89

-  

89

Unrealised gain on investments


-  

24

24


-  

26

26

Investment return


82

24

106


89

26

115

Investment management fees


(38)

(8)

(46)


(87)

(25)

(112)

Other expenses


(44)

-  

(44)


(30)

-  

(30)

(Loss)/profit before taxation


-  

16

16


(28)

1

(27)

Taxation


-  

2

2


6

5

11

(Loss)/profit after taxation


-  

18

18


(22)

6

(16)

Loss and total comprehensive (loss)/income for the year


-  

18

18


(22)

6

(16)

Basic and diluted (loss)/earnings per share


(0.01p)

0.25p

0.24p


(0.37p)

0.10p

(0.27p)




Unaudited



Audited

Balance Sheet


28 February 2018


28 February 2017





£'000




£'000

Non-current assets









Financial assets at fair value through profit or loss




6,810




6,786










Current assets









Receivables




15




23

Corporation Tax




2




11

Cash and cash equivalents




79




48





96




82

Current liabilities









Payables




(80)




(60)

Net assets




6,826




6,808










Equity attributable to equity holders



6,826




6,808

Net asset value per share




100.00p




99.76p

Statement of Changes in Shareholders' Equity












Unaudited



Audited



28 February 2018



28 February 2017





£'000




£'000

Opening shareholders' funds




6,808




-  

Issue of new shares




-  




6,824

Loss for the year




18




(16)

Closing shareholders' funds




6,826




6,808

 

Investment Portfolio





28 February 2018


28 February 2017


        Cost 

     Valuation


        Cost 

     Valuation


£'000

£'000


£'000

£'000

5,100

74.57

5,100

74.03


5,100

74.91

5,100

74.62

Non-Qualifying holdings

1,660

24.27

1,710

24.82


1,660

24.38

1,686

24.67

Financial assets at fair value through profit or loss

6,760

98.84

6,810

98.85


6,760

99.29

6,786

99.29

Cash and cash equivalents

79

1.16

79

1.15


48

0.71

48

0.71


6,839

100.00

6,889

100.00


6,808

100.00

6,834

100.00

Qualifying Holdings










Unquoted










Gas Power










Distributed Generators Ltd

3,200

46.79

3,200

46.45


3,200

47.00

3,200

46.82

Green Peak Generation Ltd

1,900

27.78

1,900

27.58


1,900

27.91

1,900

27.80


5,100

74.57

5,100

74.03


5,100

74.91

5,100

74.62












28 February 2018


28 February 2017


        Cost 

     Valuation


        Cost 

     Valuation

Non-Qualifying Holdings

£'000

£'000


£'000

£'000

Unquoted










SME Funding










Other










Modern Power Generation Ltd

1,660

24.27

1,710

24.82


1,660

24.38

1,686

24.67


1,660

24.27

1,710

24.82


1,660

24.38

1,686

24.67

 

Notes to the Financial Statements

 

1.      Corporate Information             

                                                                                                                 

The Financial Statements of the Company for the year ended 28 February 2018 were authorised for issue in accordance with a resolution of the Directors on 17 May 2018.

 

The Company applied for listing on the London Stock Exchange on 24 December 2010.

 

Triple Point VCT 2011 plc is incorporated and domiciled in Great Britain and registered in England and Wales.  The address of the Company's registered office, which is also its principal place of business, is 18 St Swithin's Lane, London, EC4N 8AD.

 

The Company is required to nominate a functional currency, being the currency in which the Company predominately operates. The functional and reporting currency is pounds sterling (£), reflecting the primary economic environment in which the Company operates.

 

The principal activity of the Company is investment. The Company's investment strategy is to offer combined exposure to cash or cash based funds and venture capital investments focused on companies with contractual revenues from financially secure counterparties.

                                                                                                                                                   

                                                                                                                                   

2.      Basis of Preparation and Accounting Policies                                     

                                                                                                                                    

Basis of Preparation

 

After making the necessary enquiries, the Directors confirm that they are satisfied that the Company has adequate resources to continue in business for the foreseeable future. The Board receives regular reports from the Investment Manager and the Directors believe that, as no material uncertainties leading to significant doubt about going concern have been identified, it is appropriate to continue to apply the going concern basis in preparing the Financial Statements.

                            

The Financial Statements of the Company for the year to 28 February 2018 have been prepared in accordance with International Financial Reporting Standards ("IFRS") adopted for use in the European Union and comply with the Statement of Recommended Practice: "Financial Statements of Investment Trust Companies and Venture Capital Trusts" (SORP) issued by the Association of Investment Companies (AIC) in November 2014 and updated in January 2017, in so far as this does not conflict with IFRS.

 

The Financial Statements are prepared on a historical cost basis except that investments are shown at fair value through profit or loss.

 

The preparation of Financial Statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these judgements.

 

The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities relate to:

·    the valuation of unlisted financial investments held at fair value through profit or loss, which are valued on the basis noted below (under the heading Non-Current Asset Investments) and in note 10; and

·    the recognition or otherwise of accrued income on loan notes and similar instruments granted to investee companies, which are assessed in conjunction with the overall valuation of unlisted financial investments as noted above.

 

The key judgements made by Directors are in the valuation of non-current assets and the assessment of realised losses. The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects that period or in the period of revision and future periods if the revision affects both current and future periods. The carrying value of investments is disclosed in note 10.

 

The Directors do not believe that there are any further key judgements made in applying accounting policies or estimates in respect of the Financial Statements.

 

These Financial Statements have been prepared in accordance with the accounting policies set out below which are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU).

 

These accounting policies have been applied consistently in preparing these Financial Statements.

 

Standards issued but not yet effective

 

The following new standards are not yet effective for the year ended 28 February 2018, and have not been applied in preparing these Financial Statements. 

 

· IFRS 9 Financial Instruments (1 January 2018)

· IFRS 15 Revenue from contracts with customers (1 January 2018)

· IFRS 16 Leases (1 January 2019)

 

The Directors have assessed the impact and are of the opinion that these standards will not have a material effect on the Financial Statements because investments will continue to be measured at fair value through profit and loss and there will be no material impact from the new impairment model.

 

Presentation of Statement of Comprehensive Income

 

In order better to reflect the activities of a Venture Capital Trust, and in accordance with the guidance issued by the Association of Investment Companies, supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and capital nature has been presented alongside the Income Statement.

 

The Company has no external debt; consequently all capital is represented by the value of share capital, distributable and other reserves.  Total shareholder equity at 28 February 2018 was £17.46 million (2017: £19.47 million).

 

Non-Current Asset Investments

 

The Company invests in financial assets with a view to profiting from their total return through income and capital growth. These investments are managed and their performance is evaluated on a fair value basis in accordance with the investment policy detailed in the Strategic Report on page 4 and information about the portfolio is provided internally on that basis to the Company's Board of Directors.  Accordingly upon initial recognition the investments are designated by the Company as "at fair value through profit or loss" in accordance with IAS39 "Financial instruments recognition and measurement".  They are included initially at fair value, which is taken to be their cost (excluding expenses incidental to the acquisition which are written off in the Statement of Comprehensive Income and allocated to "capital" at the time of acquisition).  Subsequently the investments are valued at "fair value" which is the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. This is measured as follows:

·      unlisted investments are fair valued by the Directors in accordance with the International Private Equity and Venture Capital Valuation Guidelines.  Fair value is established by using measurements of value such as price of recent transactions, discounted cash flows, cost, and initial cost of investment; and

·      listed investments are fair valued at bid price on the relevant date.

 

Where securities are designated upon initial recognition as at fair value through profit or loss, gains and losses arising from changes in fair value are included in the Statement of Comprehensive Income for the year as capital items in accordance with the AIC SORP 2014.  The profit or loss on disposal is calculated net of transaction costs of disposal.

 

Investments are recognised as financial assets on legal completion of the investment contract and are de-recognised on legal completion of the sale of an investment.

 

The Company has taken the exemption permitted by IAS 28 "Investments in Associates and Joint Ventures" and, upon initial recognition, will measure its investments in Associates at fair value with subsequent changes to fair value recognised in the income statement in the period of change.

 

Income

Investment income includes interest earned on bank balances and investment loans and includes income tax withheld at source. Dividend income is shown net of any related tax credit and is brought into account on the ex-dividend date.

 

Fixed returns on investment loans and debt are recognised on a time apportionment basis so as to reflect the effective yield, provided there is no reasonable doubt that payment will be received in due course.

 

Expenses

 

All expenses are accounted for on the accruals basis. Expenses are charged to revenue with the exception of the investment management exit fee which has been charged to the capital account and the investment management fee which has been charged 75% to the revenue account and 25% to the capital account to reflect, in the Directors' opinion, the expected long term split of returns in the form of income and capital gains respectively from the investment portfolio.

 

The Company's general expenses are split between the Share Classes using the net asset value of each Share Class divided by the total net asset value of the Company.

 

Taxation

 

Corporation tax payable is applied to profits chargeable to corporation tax, if any, at the current rate in accordance with IAS 12 "Income Taxes". The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue on the "marginal" basis as recommended by the AIC SORP 2014.

 

In accordance with IAS 12, deferred tax is recognised using the balance sheet method providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised.  Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. The Directors have considered the requirements of IAS 12 and do not believe that any provision should be made.

 

Financial Instruments

 

The Company's principal financial assets are its investments and the accounting policies in relation to those assets are set out above.  Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

 

Issued Share Capital

 

A Shares and B Shares are classified as equity because they do not contain an obligation to transfer cash or another financial asset. Issue costs associated with the allotment of shares have been deducted from the share premium account in accordance with IAS 32.

 

Cash and Cash Equivalents

 

Cash and cash equivalents representing cash available at less than 3 months' notice are classified as loans and receivables under IAS 39.

 

Reserves

 

The revenue reserve (retained earnings) and capital reserve reflect the guidance in the AIC SORP 2014. The capital reserve represents the proportion of Investment Management fees charged against capital and realised/unrealised gains or losses on the disposal/revaluation of investments. The unrealised capital reserve is not distributable. The special distributable reserve was created on court cancellation of the share premium account. The revenue reserve, realised capital reserve and special distributable reserve are distributable by way of dividend.

 

3.      Segmental Reporting

                                                                                                                                             

The Directors are of the opinion that the Company only has a single operating segment of business, being investment activity.  All revenues and assets are generated and held in the UK. 

 

4.           Investment Income

 


Year ended 28 February 2018


Year ended 28 February 2017


Ord Shares

A Shares

B Shares


Total


Ord Shares

A Shares

B Shares


Total


£'000

£'000

£'000


£'000


£'000

£'000

£'000


£'000

Loan interest

(4)

634

82


712


52

663

89


804

Other investment income

3

-  

-  


3


-  

-  

-  


-  

Dividends received

-  

-  

-  


-  


633

-  

-  


633


(1)

634

82


715


685

663

89


1,437

 

Disclosure by share class is unaudited.

 

5.      Investment Management Fees

                                                                                                                                             

TPIM provides investment management and administration services to the Company under an Investment Management Agreement effective 23 September 2010 and a deed of variation to that agreement effective 23 December 2015.

 

A Shares: The agreement provides for an investment management fee of 2.00% per annum of net assets payable quarterly in arrear for A Shares. For A Shares the appointment shall continue for a period of at least 6 years from the admission of those shares.

 

B Shares: The agreement provides for an investment management fee of 1.90% per annum of net assets payable quarterly in arrear for B Shares. For B Shares the appointment shall continue for a period of at least 6 years from the admission of those shares.

 

An administration fee of £37,500 per annum is payable quarterly in arrear.

 


Year ended 28 February 2018


Year ended 28 February 2017


Ord Shares

A Shares

B Shares


Total


Ord Shares

A Shares

B Shares


Total


£'000

£'000

£'000


£'000


£'000

£'000

£'000


£'000

Investment Management Fees

-  

-  

32


32


90

189

100


379

 

TPIM agreed not to charge their management fees for the A share class for the financial year ending 28 February 2018, to build up distributable reserves improving the ability of the share class to make dividend payments.

 

TPIM agreed not to charge their management fees from 1 January 2017 on the amounts invested in gas power projects, which represents circa 75% of the B Share Class NAV, until these investments started to generate income.

 

The total amount waived for both share classes was £303,300 which subject to available distributable reserves and the agreement of the Board maybe recoverable in future periods.

 

Fees paid to the Investment Manager for administrative and other services during the year was £19,000 (2017: £115,000). The investment Manager also received fees of £67,000 (2017: £290,000) for services provided to investee companies.

 

6.      Legal and Professional Fees

 

Legal and professional fees include remuneration paid to the Company's auditor, BDO LLP (2017 fees payable to Grant Thornton LLP) as shown in the following table:

 


Year ended 28 February 2018


Year ended 28 February 2017


Ord Shares

A Shares

B Shares


Total


Ord Shares

A Shares

B Shares


Total


£'000

£'000

£'000


£'000


£'000

£'000

£'000


£'000













Fees payable to the Company's auditor:










for the audit of the Financial Statements

1

10

7


18


5

8

4


17


1

10

7


18


5

8

4


17

 

Disclosure by share class is unaudited.

 

7.      Directors' Remuneration

 


Year ended 28 February 2018


Year ended 28 February 2017


Ord Shares

A Shares

B Shares


Total


Ord Shares

A Shares

B Shares


Total


£'000

£'000

£'000


£'000


£'000

£'000

£'000


£'000

Jane Owen

1

11

6


18


4

8

5


17

Chad Murrin

1

9

5


15


4

7

4


15

Tim Clarke

-  

8

7


15


4

7

4


15


2

28

18


48


12

22

13


47

 

The only remuneration received by the Directors was their Directors' fees. The Company has no employees other than the Non-Executive Directors. The average number of Non-Executive Directors in the year was three. Full disclosure of Directors' remuneration is included in the Directors' Remuneration report.

 

8.      Taxation


Year ended 28 February 2018


Year ended 28 February 2017


Ord Shares

A Shares

B Shares


Total


Ord Shares

A Shares

B Shares


Total


£'000

£'000

£'000


£'000


£'000

£'000

£'000


£'000

(Loss)/profit on ordinary activities before tax

(2)

783

16


797


(55)

431

(27)


348

Corporation tax @ 19%/(20%)

-

152

3


155


(11)

86

(5)


70

Effect of:












Utilisation of tax losses brought forward

-  

-  

-  


-  


(38)

-  

-  


(38)

Capital losses/(gains) not taxable

3

(46)

(4)


(47)


100

(6)

(6)


88

Dividends received not taxable

-  

-  

-  


-  


(126)

-  

-  


(126)

Disallowed expenditure

(1)

-  

-  


(1)


7

-  

-  


7

Tax (charge)/credit for the period

2

104

(2)


104


(68)

80

(11)


1

 

Capital gains and losses are exempt from corporation tax due to the Company's status as a Venture Capital Trust.

 

9.      Earnings per Share

 

On the 16 January 2018, the Ordinary Shares were cancelled. During the period to cancellation the loss per O Share was 0.03p (2017: earnings 0.06p) and was based on a loss from ordinary activities after tax of £4,714 (2017: profit £12,675) and on the weighted average number of Ordinary shares in issue during the period 17,896,734 (2017: 20,349,869).

 

The earnings per A Share is 6.83p and is based on a profit from ordinary activities after tax of £679,845 (2017: £350,664) and on the weighted average number of A Shares in issue during the period of 9,951,133 (2017: 9,951,133).

 

The earnings per B Share is 0.24p (2017: 0.27p), and is based on a profit from ordinary activities after tax of £16,275 (2017: 16,246) and on the weighted average number of B Shares in issue during the period of 6,824,266 (2017: 6,109,517).

 

Other than the cancellation of the Ordinary shares, there were no other share issues or disposals.

 

 10.     Financial Assets at Fair Value through Profit or Loss

 

Investments

Fair Value Hierarchy:

Level 1: quoted prices on active markets for identical assets or liabilities. The fair value of financial instruments traded on active markets is based on quoted market prices at the balance sheet date. A market is regarded as active where the market in which transactions for the asset or liability takes place with sufficient frequency and volume to provide pricing information on an ongoing basis. The quoted market price used for financial assets held by the Company is the current bid price. These instruments are included in level 1. 

Level 2: the fair value of financial instruments that are not traded on active markets is determined by using valuation techniques. These valuation techniques maximise the use of observable inputs including market data where it is available either directly or indirectly and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: the fair value of financial instruments that are not traded on an active market (for example, investments in unquoted companies) is determined by using valuation techniques such as discounted cash flows. If one or more of the significant inputs is based on unobservable inputs including market data, the instrument is included in level 3.

 

There have been no transfers between these classifications in the period.  Any change in fair value is recognised through the Statement of Comprehensive Income.

 

The portfolio of the Company is classified as level 3 and further details of the types of investments are provided in the Investment Manager's Review and Investment Portfolio on pages 11 and 15.

 

The Company's Investment Manager performs valuations of financial items for financial reporting purposes, including Level 3 fair values. Valuation techniques are selected based on the characteristics of each instrument, with the overall objective of maximising the use of market-based information.

 

Level 3 valuations include assumptions based on non-observable data with the majority of investments being valued on discounted cash flows or price of recent transactions.

 

 

Valuation techniques and unobservable inputs:



Sector

Valuation Techniques

Significant unobservable inputs

Inter relationship between significant unobservable inputs and fair value measurement




Estimated fair value would increase/(decrease) if:

 

Hydroelectric Power

·    Discounted cash flows: The valuation model considers the present value of expected payment, discounted using a risk-adjusted discount rate.

·    Discount rate 7.25%

(2017: 10.00%)

·    Inflation rate  2.5%

(2017: 2.0%)

·    The discount rate was lower/(higher)

 

 

·    The inflation rate was higher/(lower)

 

The Board considers the discount rates used reflect the current levels of risk and life expectancy of the investments and to be in line with Market expectations. However, consideration has been given whether the effect of changing one or more inputs to reasonably possible alternative assumptions would result in a significant change to the fair value measurement. Each unquoted portfolio company has been reviewed in order to identify the sensitivity of the valuation methodology to using alternative assumptions.

 

On this basis, where discount rates have been applied to the unquoted investments, alternative discount rates have been considered, an upside case and a downside case. For the upside case, the assumptions were flexed 1% and for the downside scenarios the assumptions were flexed by 0.5%. No sensitivity has been performed on other key assumptions such as asset life, P50 and power price forecasts because the directors do not believe there are reasonable alternative assumptions.

 

The two alternative scenarios for each investment have been modelled with the resulting movements as follows:

Applying the downside alternative, the aggregate change in value of the unquoted investments would be a reduction in the value of the portfolio of £163,058 or 1% per cent.

 

Using the upside alternative the aggregate value of the unquoted investments would be an increase of £360,646 or 2.18% per cent.  

 

It is considered that, due to the prudent selection of discount rates by the board, the sensitivity discussed above provides the most meaningful potential impact of the possible changes across the portfolio.

 

Movements in investments held at fair value through the profit or loss during the year to 28 February 2018 were as follows:


Year ended 28 February 2018


Year ended 28 February 2017


Ord Shares

A Shares

B Shares


Total


Ord Shares

A Shares

B Shares


Total


£'000

£'000

£'000


£'000


£'000

£'000

£'000


£'000













Opening Cost

-  

9,772

6,760


16,532


5,494

9,466

-  


14,960

Opening unrealised gains

5

30

26


61


256

-  

-  


256

Opening fair value at 1 March 2017

5

9,802

6,786


16,593


5,750

9,466

-  


15,216

Purchases at cost

-  

-  

-  


-  


-  

-  

5,850


5,850

Disposal proceeds

(2)

(298)

-  


(300)


(2,195)

(1,120)

(490)


(3,805)

Transfers between share classes

-  

-  

-  


-  


(2,826)

1,426

1,400


-  

Realised loss on disposal

(3)

-  

-  


(3)


(459)

-  

-  


(459)

-  

240

24


264


(124)

30

26


(68)

Reclassification as assets held for sale

-  

-  

-  


-  


(141)

-  

-  


(141)

Closing fair value at 28 February 2018

-  

9,744

6,810


16,554


5

9,802

6,786


16,593

Closing cost

-  

9,474

6,760


16,234


-  

9,772

6,760


16,532

Closing investment holding gains

-  

270

50


320


5

30

26


61

 

All investments are designated as fair value through the profit or loss at the time of acquisition and all capital gains or losses arising on investments are so designated. Given the nature of the Company's venture capital investments, the changes in fair values of such investments recognised in these Financial Statements are not considered to be readily convertible to cash in full at the balance sheet date and accordingly any gains or losses on these items are treated as unrealised.

 

Further details of the types of investments are provided in the Investment Manager's review and investment portfolio on pages 11-20, and details of entities over which the VCT has significant influence are included on page 21.

 

Material disposals during the year

 

During the year a non-qualifying investment repaid part of its loan of £250,000.

 

Deferred consideration for the sale of a portfolio of solar assets, which were disposed of in the prior year was realised and £25,000 was written off as it was deemed irrecoverable.

 

Disclosure by share class is unaudited.

 

11.   Assets Held for Sale

 

Assets held for Sale are measured at fair value through profit or loss at the discounted price expected to be achieved through the sale after the year end and are classified as Level 3 Unquoted Investments.

 

Disposal of assets held for sale  during the year




Investee Company

Cost

Opening Valuation

Disposal

Realised Gain


£'000

£'000

£'000

£'000

DLN Digital Equity

-  

191

(199)

8







-  

191

(199)

8

 

There were no income or expenses for the year relating to these disposals.

 

The investment was disposed of on 26 July 2017.

 

12.    Receivables


28 February 2018


28 February 2017


Ord Shares

A Shares

B Shares


Total


Ord Shares

A Shares

B Shares


Total


£'000

£'000

£'000


£'000


£'000

£'000

£'000


£'000













Accrued income

-  

101

13


114


2

102

18


122

Prepaid expenses

-  

3

2


5


2

2

1


5

Other debtors

-  

660

-  


660


670

574

4


1,248


-  

764

15


779


674

678

23


1,375

 

Other debtors relate to interest receivable on investment loans.

 

13.    Cash and Cash Equivalents

 

Cash and cash equivalents comprise deposits with The Royal Bank of Scotland plc and Cater Allen Private Bank.

 

14.         Payables and Accrued Expenses

 


28 February 2018


28 February 2017


Ord Shares

A Shares

B Shares


Total


Ord Shares

A Shares

B Shares


Total


£'000

£'000

£'000


£'000


£'000

£'000

£'000


£'000













Trade Creditors

-  

23

69


92


5

59

51


115

Other taxation and social security

-  

3

2


5


2

2

1


5

Accrued expenses & deferred income

-  

14

9


23


75

12

8


95


-  

40

80


120


82

73

60


215

 

Disclosure by share class is unaudited.

 

15.    Share Capital

 


28 February 2018

28 February 2017




Ordinary Shares of £0.01 each



Issued & Fully Paid



Number of shares

-  

20,349,869

Par Value £'000

-  

203

Authorised



Number of shares

-  

60,000,000

Par Value £'000

-  

600




A Ordinary Shares of £0.01 each



Issued & Fully Paid



Number of shares

9,951,133

9,951,133

Par Value £'000

100

100

Authorised



Number of shares

10,000,000

10,000,000

Par Value £'000

100

100




B Ordinary Shares of £0.01 each



Issued & Fully Paid



Number of shares

6,824,266

6,824,266

Par Value £'000

68

68

Authorised



Number of shares

10,000,000

10,000,000

Par Value £'000

100

100




Company Total Shares of £0.01 each



Issued & Fully Paid



Number of shares

16,775,399

37,125,268

Par Value £'000

168

371

 

On 16 January 2018 the Ordinary Shares were cancelled.

 

16.    Financial Instruments and Risk Management

 

The Company's financial instruments comprise VCT qualifying investments and non-qualifying investments, cash balances and liquid resources including debtors and creditors. The Company holds financial assets in accordance with its investment policy detailed in the Strategic Report on page 4.

 

The following table discloses the financial assets and liabilities of the Company in the categories defined by IAS 39, "Financial Instruments; Recognition & Measurement."


Total value

Loan and receivables

Financial Liabilities held at amortised cost

Fair value through profit or loss


£'000

£'000

£'000

£'000

Year ended 28 February 2018





Assets:





Financial assets at fair value through profit or loss

16,554

-  

-  

16,554

Assets held for sale

-  



-  

Receivables

774

774

-  

-  

Cash and cash equivalents

353

353

-  

-  


17,681

1,127

-  

16,554

Liabilities:





Other Payables

120

-  

120

-  


120

-  

120

-  






Year ended 28 February 2017





Assets:





Financial assets at fair value through profit or loss

16,593

-  

-  

16,593

Assets held for sale

191

-  

-  

191

Receivables

1,370

1,370

-  

-  

Cash and cash equivalents

1,525

1,525

-  

-  


19,679

2,895

-  

16,784

Liabilities:





Other Payables

210

-  

210

-  


210

-  

210

-  

 

Fixed Asset Investments (see note 10) are valued at fair value. Unquoted investments are carried at fair value as determined by the Directors in accordance with current venture capital industry guidelines. The fair value of all other financial assets and liabilities is represented by their carrying value on the balance sheet. The Directors believe that where an investee company's enterprise value, which is equivalent to fair value, remains unchanged since acquisition that investment should continue to be held at cost less any loan repayments received. Where they consider the investee company's enterprise value has changed since acquisition, that should be reflected by the investment being held at a value measured using a discounted cash flow model or a recent transaction price.

 

In carrying out its investment activities, the Company is exposed to various types of risk associated with the financial instruments and markets in which it invests. The Company's approach to managing its risks is set out below together with a description of the nature of the financial instruments held at the balance sheet date.

 

Market Risk

 

The Company's VCT qualifying investments are held in small and medium-sized unquoted investments which, by their nature, entail a higher level of risk and lower liquidity than investments in large quoted companies.  The Directors and Investment Manager aim to limit the risk attached to the portfolio as a whole by careful selection and timely realisation of investments, by carrying out rigorous due diligence procedures and by maintaining a spread of holdings in terms of industry sector and geographical location. The Board reviews the investment portfolio with the Investment Manager on a regular basis. Details of the Company's investment portfolio at the balance sheet date are set out on pages 15 to 21.

 

An increase of 1% in the value of investments would increase the capital profits for the period and the net asset value at 28 February 2018 by £165,535. A decrease of 1% would reduce the capital profits and net asset value by the same amount. A movement of 1% is used as a multiple to demonstrate the impact of varying changes on the capital profits and net asset value of the Company.

 

Interest Rate Risk

 

Some of the Company's financial assets are interest bearing, of which some are at fixed rates and some at variable rates.  As a result, the Company is exposed to interest rate risk arising from fluctuations in the prevailing levels of market interest rates.

 

Investments made into qualifying holdings are part equity and part loan. The loan element of investments totals £3,397,000  (2017: £3,397,000) and is subject to fixed interest rates of between 21.6% and 29.5% for between 5 - 20 years and, as a result, there is no cash flow interest rate risk. As the loans are held in conjunction with equity and are valued in combination as part of the enterprise value, fair value risk is considered part of market risk.

 

The Company also has non-qualifying loan investments of £3,380,000 (2017: £3,677,000) which carry interest rates between 7.75 and 13.5% for between 5 - 15 years.

 

The amounts held in variable rate investments at the balance sheet date are as follows:                          

      


28 February 2018


29 February 2017


£'000


£'000

Cash on Deposit

353


1,525


353


1,525

 

An increase in interest rates of 1% per annum would not have a material effect either on the revenue for the year or the net asset value at 28 February 2018. The Board believes that in the current economic climate a movement of 1% is reasonably possible.

 

Credit Risk

 

Credit risk is the risk that a counterparty will fail to discharge an obligation or commitment that it has entered into with the Company. The Investment Manager and the Board carry out a regular review of counterparty risk. The carrying value of the financial assets represent the maximum credit risk exposure at the balance sheet date.

 


28 February 2018


28 February 2017


£'000


£'000

Non Qualifying investment loans

3,446


3,744

Qualifying investment loans

3,406


3,397

Cash on Deposit

353


1,525

Receivables

774


1,370


7,979


10,036

 

The Directors do not consider any investment loan included above to be past due or impaired and no issues have been identified which would be cause for concern with regards the quality of credit for any investee company.

 

The Company's bank accounts are maintained with The Royal Bank of Scotland plc ("RBS"). Should the credit quality

or financial position of RBS deteriorate significantly, the Investment Manager will move the cash holdings to another bank. Credit risk arising on unquoted loan stock held within unlisted investments is considered to be part of Market risk as disclosed above.

 

Liquidity Risk

 

The Company's financial assets include investments in unquoted equity securities which are not traded on a recognised stock exchange and which are illiquid. As a result the Company may not be able to realise some of its investments in these instruments quickly at an amount close to their fair value in order to meet its liquidity requirements.

 

The Company's liquidity risk is managed on a continuing basis by the Investment Manager in accordance with policies and procedures laid down by the Board. The Company's overall liquidity risks are monitored by the Board on a quarterly basis.

 

The Board maintains a liquidity management policy where cash and future cash flows from operating activities will be sufficient to pay expenses. At 28 February 2018 cash held by the Company amounted to £353,000.

 

Foreign Currency Risk

 

The Company does not have exposure to material foreign currency risks.

 

17.    Net Asset Value per Share

 

The net asset value per share for the A Shares is 106.90p and is calculated based on net assets of £10,638,000 divided by the 9,951,133 A Shares in issue.

 

The net asset value per share for the B Shares is 1.00p and is calculated on net assets of £6,824,000 divided by the 6,824,266 B Shares in issue.

 

18.    Commitments and Contingencies                                                                                    

                                                                                                                                     

The Company has no contingent liabilities or commitments.

 

19.    Relationship with Investment Manager                          

 

During the period, TPIM received £51,394 (which has been expensed by the Company) for providing management and administrative services to the Company. TPIM have agreed not to charge their management fees for the A Share Class for the current financial year ending 28 February 2018, to enable the A Share Class to build up distributable reserves. TPIM have agreed not to charge their management fees from 1 January 2017 on the amounts invested into two companies constructing gas power plants, which represents circa 75% of the B Share Class NAV, until these investments start to generate income for the B Share Class.

 

20.    Related Party Transactions

 

The Directors Remuneration Statement on pages 32 to 33 discloses the Directors' remuneration and shareholdings.

 

There were no other related party transactions during the period.

 

21.    Post Balance Sheet Events

 

There were no post balance sheet events.

 

22.    Dividend

 

Ordinary Share Class:

On 13 April 2017 a dividend of £1,017,493 equal to 5p per share was paid to the Ordinary Class Shareholders. 

On 23 June 2017 a dividend of £406,997 equal to 2p per share was paid to the Ordinary Class Shareholders. On 24 November a dividend of £671,546 equal to 3.30p per share was paid to the Ordinary Class Shareholders.

 

During the year dividends of £255,843 were paid out of the Special Distributable Reserve, £1,381,390 from the Realised Capital Reserve and £458,803 from Revenue Reserve.

 

Following the final dividend, the shares were cancelled and a final payment of £203,499 equal to 1p per share was paid to the Ordinary Shareholders, bringing the total return to Ordinary Shareholders to 115.05p.

 

A Share Class:

On 23 June 2017 a dividend of £398,045 equal to 4p per share was paid to the A Class Shareholders. This was paid entirely from the Revenue Reserve.

 

The Board has resolved to pay a second dividend to A Class Shareholders of £273,656 equal to 2.75p per share which will be paid on 28 June 2018 to shareholders on the register on 15 June 2018.

 

Information

 

Details of Advisers

 

Secretary and Registered Office:

Triple Point Investment Management LLP

18 St Swithin's Lane

London

EC4N 8AD

 

Registered Number

07324448

 

FCA Registration number

659605

 

Investment Manager and Administrator

Triple Point Investment Management LLP

18 St Swithin's Lane

London

EC4N 8AD

 

Tel: 020 7201 8989

 

Independent Auditor

BDO LLP

55 Baker Street

London

W1U 7EU

 

Solicitors

Howard Kennedy LLP

No. 1 London Bridge

London

SE1 9BG

 

Registrars

Neville Registrars Limited

Neville House

18 Laurel Lane

Halesowen

West Midlands

B63 3DA

 

VCT Taxation Advisers

Philip Hare & Associates LLP

First floor

4-6 Staple Inn

Holborn

London

WC1V 7QH

 

Bankers

The Royal Bank of Scotland plc                                       

54 Lime Street                                                      

London

EC3M 7NQ

 

Shareholder Information

 

The Company

Triple Point VCT 2011 plc is a Venture Capital Trust. The Investment Manager is Triple Point Investment Management LLP. The Company was incorporated on 23 July 2010.

 

The Company's investment strategy is to offer combined exposure to cash or cash based funds and venture capital investments focused on companies with contractual revenues from financially secure counterparties.  The Company continues to meet the condition that 70% of relevant funds must be invested in qualifying investments.

                                                                                                                                                

Financial Calendar

The Company's financial calendar is as follows:

 

12 July 2018           Annual General Meeting

 

October 2018         Interim report for the six months ending 31 August 2018 despatched

                                                                                                                                                             

May 2019              Results for the year to 28 February 2019 announced; Annual Report and Financial                                                 Statements published.

 

Notice of Annual General Meeting

 

NOTICE is hereby given that the Annual General Meeting of Triple Point VCT 2011 plc will be held at 18 St Swithin's Lane, London, EC4N 8AD at 10.45am on Thursday 12 July 2018 for the following purposes:

 

Ordinary Business

 

1.  To receive, consider and adopt the Report of the Directors and Financial Statements of the Company for the year ended 28 February 2018 together with the Independent Auditors Report thereon (Ordinary Resolution).

 

2.  To approve the Directors' Remuneration Report for the year ended 28 February 2018 (Ordinary Resolution).

 

3.  To re-elect Jane Owen as a Director (Ordinary Resolution).).

 

4.  To appoint BDO LLP as Auditor and determine their remuneration (Ordinary Resolution).

 

Special Business

 

5.  That the Company be and is hereby authorised in accordance with s701 of the Companies Act 2006 (the "Act") to make one or more market purchases (as defined in section 693(4) of the Act) of A Shares or B Shares provided that:

 

(i)         the maximum aggregate number of A Shares authorised to be purchased is an amount equal to 10% of the issued A Shares as at the date of this Resolution;

 

(ii)         the maximum aggregate number of B Shares authorised to be purchased is an amount equal to 10% of the issued B Shares as at the date of this Resolution;

 

(iii)        the minimum price which may be paid for an A Share or B Share is 1 pence;

 

(iv)        the maximum price which may be paid for an A Share or B Share is an amount, exclusive of expenses, equal to 105 per cent. of the average of the middle market prices for the A Shares and B Shares as derived from the Daily Official List of the UK Listing Authority for the five business days immediately preceding the day on which that A Share or B Share (as applicable) is purchased; and

 

(v)         this authority shall expire either at the conclusion of the next Annual General Meeting of the Company or 15 months following the date of the passing of this Resolution, whichever is the first to occur (unless previously renewed, varied or revoked by the Company in general meeting), provided that the Company may, before such expiry, make a contract to purchase its own shares which would or might be executed wholly or partly after such expiry, and the Company may make a purchase of its own shares in pursuance of such contract as if the authority hereby conferred had not expired. (Special Resolution).

 

By Order of the Board

 

Jane Owen

Director

Registered Office:

18 St Swithin's Lane

London EC4N 8AD                                                                                                  17 May 2018

 

Notes:

 

(i)         A member entitled to vote at the Meeting is entitled to appoint one or more proxies to attend and, on a poll, vote on his or her behalf. A proxy need not be a member of the Company.

(ii)        A form of proxy is enclosed. To be effective, the instrument appointing a proxy (together with the power of attorney or other authority, if any, under which it is signed, or a certified copy of such power or authority) must be deposited at or posted to the office of the registrars of the Company, Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands B63 3DA, so as to be received not less than 48 hours before the time fixed for the Meeting. Completion and return of the form of proxy will not preclude a member from attending or voting at the Meeting in person if he or she so wishes.

(iii)       Members who hold their shares in uncertificated form must be entered in the Company's register of Members 48 hours before the Meeting to be entitled to attend or vote at the Meeting. Such shareholders may only cast votes in respect of Ordinary Shares held by them at such time.

(iv)  Copies of the service contracts of each of the Directors,  the register of Directors' interests in shares of the Company kept in accordance with the Listing Rules and a copy of the Memorandum and Articles of Association of the Company, will be available for inspection at the registered offer of the Company during usual business hours on any week day (Saturdays, Sundays and public holidays excepted) from the date of this notice until the date of the Annual General Meeting and at the place of the Annual General Meeting from at least 15 minutes prior to and until the conclusion of the Annual General Meeting. 

(v) Form of Proxy

 

Relating to the 2018 Annual General Meeting of Triple Point VCT 2011 plc

I/We…………………………………………………………………………………………………………………………

BLOCK CAPITALS PLEASE - Name in which shares registered

 

of…………………………………………………………………………………………………………………………

 

………………………………………………………………………………………………………………………………

or failing him/her the Chairman of the meeting to be my/our proxy and vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held on 10.45am on Thursday 12 July 2018, notice of which was sent to shareholders with the Directors' Report and the accounts for the period ended 28 February 2018, and at any adjournment thereof. The proxy will vote as indicated below in respect of the resolutions set out in the notice of meeting:

 

Resolution number

For

Against

Withheld

1.

To receive, consider and adopt the Report of the Directors and the Financial Statements for the year ended 28 February 2018.

 




2.

To approve the implementation report set out in the Directors' Remuneration Report for the year ended 28 February 2018.

 




3.

To re-elect Jane Owen as a Director

 




4.

To appoint BDO LLP as auditor and authorise the Directors to agree their remuneration.

 




5.

To authorise the Directors to make market purchases of the Company's own shares (Special Resolution).

 




 

Signed: ....................................................................... Dated: ................................................ ..2018

 

Notes

1.   A member wishing to appoint a person other than the Chairman of the meeting as proxy should insert the name and address of such person in the space provided.

2.   Use of the proxy form does not preclude a member from attending and voting in person.

3.   Where this form of proxy is executed by a corporation it must be either under its seal or under the hand of an officer or attorney duly authorised.

4.   If the proxy form is signed and returned without any indication as to how the proxy shall vote, the proxy will exercise his/her discretion as to whether and how he/she votes.

5.   To be valid, the proxy form must be received by Neville Registrars at Neville House, 18 Laurel Lane, Halesowen, West Midlands B63 3DA no later than 48 hours before the commencement of the meeting.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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